Palo Alto Networks (PANW) is a "premium security play" for long-term growth investors, Tigress Financial Partners said in a Friday note initiating coverage on the company's stock.

The company is in a good position as a leading cybersecurity provider in an environment with growing cyber threats, Tigress analysts said. Its $25 billion acquisition of CyberArk Software (CYBR) enhances its capabilities in identity security and expands enterprise browser protection, positioning it as a "comprehensive one-stop shop" for AI security and zero trust architectures, they said.

Palo Alto is gaining market share in a rapidly expanding cybersecurity market currently valued at $245 billion and anticipated to double to $500 billion by 2030, representing a 12.9% compounded annual growth rate, the analysts said. Its core total addressable market of $110 billion spans network security, cloud security, secure access service edge, and security operations, they noted.

Further, the analysts said that the Guiding and Establishing National Innovation for US, or GENIUS Act, will benefit the company as it mandates that permitted payment stablecoin issuers deploy advanced technological capabilities to comply with strict cybersecurity requirements. Palo Alto is at an advantage in this "AI cyber arms race" due to its scale and breadth of data, the analysts said.

Palo Alto's disciplined capital allocation also drives its ongoing growth and will help it sustain leadership in the industry, according to the note.

Tigress initiated coverage of the company's stock with buy rating and a price target of $245.

Price: 202.00, Change: -0.21, Percent Change: -0.10