Breaking News
Investing Pro 0
Black Friday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Jefferies Initiates Coverage of Cyber Stocks - Okta a 'Fantastic Buying Opportunity'

Stock Markets Sep 15, 2022 16:08
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
FTNT
-0.82%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
PANW
-0.19%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
OKTA
-1.28%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ZS
-0.95%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Sam Boughedda

In separate research notes Thursday, a Jefferies analyst initiated coverage of cyber stocks Zscaler (NASDAQ:ZS), Palo Alto Networks (NASDAQ:PANW), Okta, Inc. (NASDAQ:OKTA), and Fortinet (NASDAQ:FTNT).

He initiated coverage of Zscaler with a Hold rating and $200 per share price target, saying the company is positioned well, but it is reflected in its valuation.

"A pioneer in network security, Zscaler is in the early stages of monetizing its position via its unique internet architecture while meeting pressing customer demand for consolidation of security functionalities," wrote the analyst. "ZS has astutely leveraged this position via its GTM prowess, resulting in significant growth and share gains. However, 15x EV/CY23E rev seems fairly priced, with appreciation driven by upside that we believe is likely to be more muted than prior years."

The analyst assumed coverage of Palo Alto Networks, maintaining a Buy rating and setting a $220 price target.

"PANW’s recent results appear immune to macro as it's accelerated billings growth 3 straight Qs. PANW’s combination of holistic platform (spend consolidator) levered to the cloud as well as prudent FY23 guidance creates an appealing set up for our fav cyber platform with shares trading at 8x EV/ CY23E rev—attractive for an asset delivering 20%+ rev growth/OPM LT," he explained.

Okta was initiated with a Buy rating and a $90 per share price target, with the analyst stating it is a fantastic buying opportunity.

"Myriad issues (cyber incident, macro, & sales integration) have plagued Okta this year, leading to a share overcorrection (-73% ytd; 4x EV/CY23E rev). This has, in our view, created an attractive entry point for a leading cyber asset. While we do not discount the amount of work in front of the company (likely to take a few quarters), we highlight a fantastic product, coupled with a large and underpenetrated market," wrote the analyst.

Finally, on Fortinet, the analyst initiated a Buy rating and $65 price target saying the company represents a rare blend of growth and GAAP profitability as it "continues to execute on its vision of converged security & networking."

"Businesses will rely on a hybrid environment for the foreseeable future and the combined cyber/networking market is massive, making durable & efficient growth feel achievable. Shares trade at just 22x EV/ CY23E FCF vs large-cap median 25x which we believe offers downside protection to complement share gains," stated the analyst.

Jefferies Initiates Coverage of Cyber Stocks - Okta a 'Fantastic Buying Opportunity'
 

Related Articles

Centre to scrap over 15-year-old govt vehicles
Centre to scrap over 15-year-old govt vehicles By IANS - Nov 27, 2022 1

New Delhi, Nov 27 (IANS) Aiming to decongest Indian roads of millions of worn out government vehicles, the Centre has issued a draft notification proposing mandatory non-renewal...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email