Palo Alto Networks Inc. (NYSE: PANW) continues to gain market share while further expanding its margin. Its fourth-quarter earnings were representative of this, and analysts have overwhelmingly poured in to the stock. It is worth mentioning that the company had its strongest revenue growth in the past 10 quarters.

The company reported its fiscal fourth-quarter financial results after the markets closed on Wednesday. The company had $0.28 in earnings per share (EPS) on $283.9 million in revenue. That compared to consensus estimates from Thomson Reuters of $0.25 in EPS on revenue of $256.26 million. In the same period of the previous year, it posted EPS of $0.11 and $178.23 million in revenue.

Fiscal fourth-quarter billings grew 69% year over year to $393.6 million, while total revenue grew 59% to its record level.

Product revenue totaled $154 million (up 54.4% year over year), driven by strong demand for both high and mid-range appliances. Subscription revenue grew 71% year over year to $64.1 million. Wildfire continued to outperform adding about 1,000 customers, bringing the total to 7,000 customers. Operating margins expanded to 14.1% from 8.1% in the fourth quarter.

The company gave guidance for the fiscal first quarter: Palo Alto expects EPS in the range of $0.31 to $0.32 and revenues in the range of $280 million to $284 million. Wall Street thus far is looking for $0.31 per share and $269.72 million.

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In its report, Oppenheimer detailed:

We look to Palo Alto Networks’ stellar fiscal fourth quarter results as a proxy to strong demand trends within the security arena (which appears to be operating in a league of its own). Yet again, all financial metrics were handily exceeded with a stellar billings growth of 69% year over year ($397 million vs. $338 million estimate). Palo Alto Networks’ platform approach is playing out flawlessly and is further supported by: 1. ongoing acceptance of Palo Alto Networks’ high-end appliances (7050 & 3060); we envision a strong reception for the recently launched 200 GBPS PA-7080 appliance; 2. stellar growth in recurring subscription revenue driving better margin output; and 3. ongoing margin expansion (14.1% vs. 13.9%E) supporting Palo Alto Networks’ exiting fiscal 2016 with operating margins of 22% to 25%. We are raising fiscal 2016 estimates and our price target to $190 from $180.

Oppenheimer introduced its first-quarter estimates as $0.32 in EPS and $282.0 million in revenue. For fiscal 2016, the firm raised its estimates to $1.75 in EPS on $1.32 billion in revenue from $1.70 in EPS on $1.24 billion in revenue. For fiscal 2017, Oppenheimer envisions EPS of $2.70 and revenue of $1.81 billion.

Credit Suisse believes that Palo Alto Networks’ unique technology platform and long-term corporate strategy, as well as management’s ability to execute its vision, position the company to continue to gain share in the network security market. This will drive strong sustained revenue and earnings growth.

The brokerage firm also considers that the strong data points that the company hit in its fourth-quarter earnings report highlight Palo Alto Networks’ ability to upsell into its installed base and sell additional services, which remains core to Credit Suisse’s positive thesis.

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In its report, Credit Suisse gave its estimates for fiscal 2016 as $1.77 in EPS on $1.329 billion in revenue. The firm raised its fiscal 2017-2018 EPS estimates to $2.71 and $3.75 from $2.63 and $3.58, respectively.

A few other analysts weighed in on Palo Alto Networks after earnings:

• FBR has an Outperform rating and raised its price target to $200 from $175.
• Guggenheim has a Buy rating and raised its price target to $210 from $200.
• JMP Securities has a Market Outperform rating and raised its price target to $220 from $210.
• Needham has a Buy rating and raised its price target to $202 from $182.
• Pacific Crest has an Overweight rating and raised its price target to $190 from $180.
• Piper Jaffray has an Overweight rating and raised its price target to $200 from $185.
• Stifel has a Buy rating and raised its price target to $200 from $180.
• Wunderlich has a Hold rating and raised its price target to $190 from $180.

Shares of Palo Alto Networks were up 5.6% at $174.40 on Thursday morning. The stock has a consensus analyst price target of $193.53 and a 52-week trading range of $87.83 to $200.55.

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