This tech stock is up nearly 20% over the past year. But one pro says it’s just getting started

Published Sun, Sep 4 20228:53 PM EDT

Tech stocks have endured a difficult year so far, with some of the biggest names deep in the red. But cybersecurity firm Palo Alto has stood out for its relative resilience, and market veteran Nancy Tengler believes the stock is just getting started. Palo Alto is down around 3% this year — outperforming the tech-heavy Nasdaq Composite , which has plunged around 26% in the same period. Over the past 12 months, Palo Alto is around 17% higher — but Tengler believes the company is just in its "early innings of growth." "The valuation is pretty healthy. We've been in it for a long time," Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, told CNBC "Street Signs Asia" on Wednesday. "I'm not advocating that your viewers jump in here. But as we continue to see that tug of war between fear and greed and that choppiness, the volatility in the equity market, at least through the first half of September, you might get a better chance or a better price to step in." Tengler is not the only one who is bullish on the stock. It has a 90% buy or overweight rating among the analysts covering it, according to FactSet, and an average price target of around $660 — giving it a potential upside of around 22% from its current price. A standout quarter The California-based firm had a standout fiscal fourth quarter . It reported a profit for the first time in a decade and guided for full-year profitability in fiscal 2023. The firm also posted a 44% growth in billings in the same quarter — a four-year high. The company defines billings as currently recognized and deferred revenue from subscriptions, support, and products. 'Safer bet' in tech Tengler said her bullishness on Palo Alto might be construed as a "controversial" or "gutsy" call, but argued that it is in fact a safer bet within the tech space. Read more These outperforming stocks could be safe bets right now — and analysts give them serious upside Goldman Sachs says mutual funds have been on a tear this year. Here's what they're buying Wall Street pros issue warning on stocks. Here's what they say to buy instead "What we're trying to do as investors is position ourselves for the next three to five years, and rising interest rates have a much greater impact on companies that don't produce earnings that are long duration and have earnings that will only appear in the future," she said. Higher interest rates weigh on growth stocks such as tech, as they generate most of their cash flows and earnings in the future. The massive sell-off in tech stocks this year has been driven by the rapid pace of rate hikes, as well as uncertainty over the scale of further hikes. Against this backdrop, Tengler said she's interested in owning stocks that have a "secular narrative" which drive future earnings growth. This makes them a safer investment because they are more likely to deliver reliable earnings, she added. She also said cybersecurity is a "sustainable narrative," given increasing demand within the space.