Darspal S Mann
Long/short equity, growth at reasonable price, special situations, deep value

Barracuda Networks: Start Of The End Of The Firewall, As We Know It

Barracuda Networks (CUDA) stock is down 50% from the IPO price, two years ago. The correction is more than just a reaction to the broader market blues. The weakening macro dynamics in the cloud based security space and small cap growth names suggest any efforts to pick a bottom may be proven ill timed, since the company as well as sector specific indicators have just started to weaken the valuation premium enjoyed by most players in the space, including the acquisition premium.

Late last week, the company missed numbers again and reduced revenue guidance by a few percentage points from the consensus. Not a big deal, some may say, if revenue grew by 14%, especially now that the

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