11:08 AM EDT, 08/21/2024 (MT Newswires) -- Palo Alto Networks ( PANW ) reported "strong" fiscal Q4 results but there are still concerns that could limit the stock's future gains, including a mixed revenue and remaining performance obligation, or RPO, outlook, BofA Securities said in a note Wednesday.

Analysts, including Tal Liani, noted strong results such as a 42.8% year-over-year growth in Next-Generation Security annual recurring revenue, solid profit margins, and good free cash flow, while flagging some ongoing issues that could affect the investment outlook.

Concerns included the company avoiding missing estimates for fiscal Q1 and fiscal 2025 by including expected revenue from the QRadar acquisition before it was finalized. Palo Alto also changed its focus from billings to RPOs but didn't provide guidance on current RPOs.

The cybersecurity firm's RPO growth guidance for fiscal Q1 and FY25 fell short of Street expectations, and there's a disconnect between the growth in platform deals and weaker RPO growth, the analysts added.

They also said that while the free cash flow margin is high, they see limited potential for further gains. With the stock trading at a high valuation, they believe there is limited upside.

BofA Securities adjusted the price target on Palo Alto Networks ( PANW ) to $400 from $370 while maintaining its neutral rating.

Price: 366.88, Change: -1.13, Percent Change: -0.31