Palo Alto Networks' (PANW) valuation multiples trail the company's improving portfolio quality and growing scale, Berenberg said Tuesday in a report.

The company "is a rare quality compounder in cybersecurity, with best-in-class execution, multiple growth engines, and strong product breadth," the report said.

Consensus models assume the company will convert about 59 customers per quarter to broader product bundles, rising to about 2,600 by fiscal 2030, Berenberg said. Even 2,500 to 3,500 such conversions by 2030 may not represent an upper limit, with momentum expected to build following the CyberArk and Chronosphere acquisitions, the report said.

Berenberg initiated coverage on Palo Alto Networks stock with a buy rating and a $215 price target.

Price: 175.63, Change: +6.07, Percent Change: +3.58