Goldman Sachs says buy Palo Alto Networks as the cybersecurity company diversifies its business

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Goldman's price target implies the stock could gain 23.3% over the next 12 months.

Palo Alto Networks ' diversification strategies can mean big gains for the stock, according to Goldman Sachs. Analyst Gabriela Borges initiated the cybersecurity stock with a buy rating and a $205 price target, implying upside of 23.3% from Monday's closing price of $166.31.

The analyst also noted that Palo Alto should have "more consistent and durable growth" than peers. One of those big business opportunities is its next-generation security unit, which Borges said could grow at a compound annual rate of 28% over the next three years. That's driven by growth in sub-businesses called SASE, Cloud and Cortex.

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