Market Mirage
Long/short equity, value, hedge fund manager

Proofpoint - The Proof Is Lacking In The Pudding

Reading through the presentation materials, Proofpoint (NASDAQ:PFPT) seems to have it all. An industry leader, the company is fast growing, EBITDA profitable and cash generative with a rock solid balance sheet. Sell-side analysts are lapping it up with plenty of buy recommendations.

Unfortunately once you dig into reported numbers, at least three of those things are not actually true. In fact the business is hugely loss-making on an operating level, its balance sheet is a potential powder keg and growth may not be as impressive as claimed.

What initially piqued my interest in PFPT was its improbable balance sheet with simultaneously large amounts of cash and debt. Having started my research, I was not entirely surprised to discover

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