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- Barracuda Networks' stock has declined 33.9% year to date. The decline has occurred due to lower than expected revenue growth and operating income.
- Management has been trying to increase the company's growth rate over the last several years. As a result, they have entered several new market segments.
- Yet, Barracuda doesn't have a major competitive advantage in these markets. Additionally, management doesn't spend enough money to compete effectively.
- Management has simply expanded into too many market segments without a competitive advantage. Additionally, they don't have the resources to properly sell and develop products for each market.
- Even though the stock has declined 33.9%, the company isn't well positioned in any market segment to drive revenue significantly higher over the long run.
Tue, Nov. 25, 2:30 PM
- At least nine firms have hiked their Palo Alto Networks (NYSE:PANW) targets in response to the company's FQ1 beat, above-consensus FQ2 guidance, and strong billings print. Shares have rallied to fresh highs after trading lower AH yesterday.
- "In a market that's growing at a 5%-10% clip, PANW's 50% revenue growth and 52% billings growth don’t imply any slowdown in the pace of market share gains," writes Deutsche ($125 PT). The firm observes Palo Alto's WildFire malware-detection service now has 4K paid customers, up from 3K a quarter ago and representing 19% of Palo Alto's total base.
- Likewise, Credit Suisse ($135 PT) thinks the FQ1 report highlights "Palo Alto's ability to upsell into its installed base." It's also happy with growing success in landing major enterprise accounts.
- Stifel ($120 PT) expects "“continued runway for both product revenue, driven by the growing adoption of the company's high-end data center appliances such as PA-7050, as well as recurring revenue, with growth in this arena coming from an improving attach rate and healthy maintenance renewal trends.”
- Needham ($123 PT): "We believe PANW continues to benefit from news about corporate data breaches, and as a mindshare leader in “next gen firewall” PANW is likely being short-listed on most large network security deals." It thinks FQ2 guidance is conservative.
- Peer Barracuda Networks (CUDA +3.1%) is also rallying.
Tue, Nov. 11, 12:27 PM
- As part of a broader coverage launch for enterprise security and software stocks, Macquarie has launched coverage on Barracuda Networks (NYSE:CUDA) with an Outperform rating and $35 target.
- Analyst Aaron Schwartz, discussing his bullish stance on security names in general: "Events have been catalysts to elevate cyber security to a board-level concern, increasing the relevancy of security within the overall IT spectrum. The long term bullish security thesis involves an increasing share of IT spend where, despite the relevancy and cost of attach, security remains stuck at only 4 percent of total IT spend."
- Barracuda is at its highest levels since July.
Tue, Nov. 4, 4:27 PM
- In addition to missing Q3 revenue estimates (while beating on EPS), FireEye (NASDAQ:FEYE) is guiding for Q4 revenue of $135M-$147M, below a $144.2M consensus at the midpoint. EPS guidance is at -$0.46 to -$0.50 vs. a -$0.50 consensus.
- In spite of the revenue miss, Q3 billings totaled $165.1M, +45% Q/Q and above guidance of $150M-$155M. Q4 billings guidance is at $195M-$210M, and full-year guidance has been hiked to $573M-$588M from $560M-$580M.
- Q3 product revenue +104% Y/Y to $48.4M; subscription/services revenue +248% to $65.8M. Both figures were boosted by the Mandiant acquisition.
- Spending remains aggressive: Excluding restructuring charges, GAAP opex (also boosted by Mandiant) rose 157% to $196.5M.
- Peers are also off: PANW -3.5% AH. CUDA -1.9%.
- Q3 results, PR
Thu, Oct. 9, 4:08 PM| Comment!
Fri, Oct. 3, 10:56 AM
- Fortinet (FTNT +2.9%), Imperva (IMPV +2.9%), Qualys (QLYS +3.5%), Barracuda Networks (CUDA +6.4%), and newly-public CyberArk (CYBR +4.8%) are all rallying after JPMorgan disclosed contact info for 83M accounts was exposed by a data breach. Palo Alto Networks is also up, aided by a bullish Piper note.
- On the other hand, FireEye (FEYE -2.7%) is slumping in response to a downgrade to Underperform from Northland Securities. The firm is worried FireEye will be hurt by intensifying competition from the likes of Palo Alto, Proofpoint, and private Cyphort. Many others on the sell-side have argued FireEye's threat-prevention hardware/software has a technology edge over rivals.
- Several security stocks also rallied following news of Apple's iCloud hack.
Thu, Jul. 24, 1:57 PM
- Fortinet (FTNT +6.7%) beat Q2 estimates with the help of 33% Y/Y billings growth (exceeded rev. growth of 25%) and a 95% Y/Y increase in $500K+ deals.
- The company guided in its CC slides (.pdf) for Q3 revenue of $182M-$185M and EPS of $0.11 vs. a consensus of $177.3M and $0.13. Full-year guidance is for revenue of $735M-$740M and EPS of $0.47-$0.48 vs. a consensus of $714M and $0.50. Billings are expected to grow ~22% to $835M-$840M.
- On its CC (transcript), the UTM hardware leader suggested its light EPS guidance is due to a heavy investment pace, including aggressive sales hiring. It also mentioned Americas sales were up 40% Y/Y, fueled by a 73% increase for U.S. enterprise.
- Meanwhile, Vasco Data (VDSI +16.9%) trounced Q2 estimates and hiked its guidance for 2014 revenue from traditional businesses to $175M-$180M from $168M-$172M. The company notes adoption of new productions leveraging its Cronto visual authentication tech (acquired last year) has been strong.
- FireEye (FEYE +3%), Palo Alto Networks (PANW +2.8%), Proofpoint (PFPT +3.6%), and Check Point (CHKP +1.7%) are trading higher. Proofpoint reports after the bell; Check Point provided a Q2 beat and healthy top-line guidance yesterday.
- On the other hand, Barracuda (CUDA -5.9%) is selling off. JPMorgan attributes the decline to Fortinet's CC remarks about rapidly growing sales to mid-sized businesses - Barracuda depends heavily on them - with the help of new resellers. The firm argues the concerns are overblown, particularly since Fortinet is more focused on larger mid-sized businesses.
Thu, Jul. 10, 4:32 PM
- Barracuda (CUDA) had FQ1 billings of $87.6M, +17% Y/Y and well above revenue of $66.2M. Its deferred revenue balance rose by $15.3M Q/Q to $328.5M.
- Subscription revenue +17% Y/Y to $45.4M (69% of total), hardware revenue +19% to $20.8M. 8.9K new active customers were added, raising the total base to 214K. 7.9K were added in FQ4.
- Gross margin rose to 78.2% from 76.7% a year ago. Opex +10% Y/Y to $51M.
- FQ1 results, PR
Thu, Jul. 10, 4:19 PM| Comment!
Fri, May. 30, 1:49 PM
- High-beta enterprise tech names are particularly well-represented in a momentum stock selloff as Splunk, Nimble Storage, Violin Memory, and (especially) Infoblox fall post-earnings.
- Analytics/data visualization software vendors Tableau (DATA -6.5%) and Qlik (QLIK -4.1%), often hyped (like Splunk) as big data plays, are among the decliners. As is flash storage vendor Fusion-io (FIO -5.4%), which competes with Violin and (to a lesser extent) Nimble. But they're far from the only ones.
- Security decliners: FEYE -6.5%. CUDA -8.4%. IMPV -7.4%. PFPT -5.7%. VDSI -4%. QLYS -4.5%.
- Cloud software decliners: WDAY -4.1%. JIVE -4.3%. MKTO -7.4%. NOW -4.9%. TNGO -5.1%. CSLT -6.9%. TXTR -6.7%. RALY -11.6%.
Thu, May. 1, 11:49 AM
- Cloud data protection software/service provider Proofpoint (PFPT +16.5%) expects Q1 revenue of $43M-$44M and EPS of -$0.11 to -$0.13, largely above a consensus of $42M and -$0.13. Full-year guidance is for revenue of $178M-$180M and EPS of -$0.41 to -$0.46, above a consensus of $175.9M and -$0.49.
- Moreover, full-year billings are expected to be in a range of $207M-$209M, well above revenue and also $4M better than prior guidance. Q1 billings rose 33% Y/Y to $46.6M (compares with revenue of $42.7M, +39%).
- Palo Alto Networks (PANW +7.4%) and FireEye (FEYE +7.9%), each of whom offer subcription-based cloud services to complement their security hardware/software, are following Proofpoint higher, as is Barracuda Networks (CUDA +6.3%). Imperva (IMPV +3.5%), whose April 9 warning triggered a massive rout in security stocks, is getting a lift ahead of today's Q1 report.
- On its CC (transcript), Proofpoint noted its Targeted Attack Protection business posted 100%+ Y/Y sales growth, thanks in part to a deal with a major enterprise that involves 300K+ users. Recently-acquired Sendmail provided $2.4M in subscription revenue.
Fri, Apr. 25, 9:13 AM
Thu, Apr. 24, 5:41 PM
Wed, Apr. 9, 5:14 PM
- Fortinet (FTNT) is down 1.3%, and Barracuda Networks (CUDA) is down 2.4%, after Imperva issued an ugly Q1 warning blamed on lengthy sales cycles (particularly in the U.S.). FireEye, Palo Alto Networks, and KEYW Holding are also off.
- Barracuda competes with Imperva (as well as F5) in the Web application firewall market. Fortinet's Q1 report arrives on April 23.
Fri, Apr. 4, 9:43 AM
- ServiceNow (NOW +0.9%) has been upgraded to Overweight by Evercore. Shares fell 11% yesterday as part of a brutal selloff in high-beta enterprise tech names.
- Aruba Networks (ARUN +2.9%) has been started at Outperform by Northland as part of a networking hardware sector launch.
- Barracuda Networks (CUDA +3.2%) has been started at Outperform by Imperial Capital.
- Hollysys Automation (HOLI +0.4%) has been started at Outperform by Credit Suisse.
Thu, Jan. 30, 2:47 PM
- In addition to beating Q4 estimates, Fortinet (FTNT +2.9%) guided for Q1 revenue of $155M-$159M (+16% Y/Y and largely above a $155.2M consensus) and billings of $168M-$173M (+15% Y/Y). EPS, pressured by aggressive sales hiring, is expected to come in at $0.08, below a $0.12 consensus.
- Several other security hardware and software names are also outperforming on a strong day for tech stocks. PANW +5.9%. IMPV +3.8%. PFPT +4.8%. CUDA +6.3%. QLYS +6.5%. The gains come even though security software giant Symantec (has been losing share) is selling off after providing soft March quarter guidance.
- Fortinet produced billings and free cash flow of $684M and $134M in 2013, well above revenue and net income of $684M and $81M. A major reason: the company's deferred revenue balance rose 19% Y/Y to $433M.
- 37 $500K+ deals were signed in Q4, up from 27 a year earlier. At the same time, Fortinet saw a notable mix shift towards cheaper hardware: 41% of all sales of Fortinet's flagship FortiGate unified threat management platform involved entry-level products in Q4, up from 34% a year earlier. High-end products fell to 30% of sales from 36%.
- CC transcript, earnings slides
Thu, Jan. 9, 6:14 PM
- Barracuda (CUDA) shares slump 11% AH following a beat in the high-flying IPO's first reported quarter as a public company.
- Investors, who had sent share soaring 103% from Nov. lows, were left wanting more from the company's guidance.
- Gross billings in the quarter grew 19.1% Y/Y to $77.5M, outpacing revenue growth of 15% Y/Y.
- EBITDA grew 21% Y/Y to $13M.
- As to the Cisco effect, Barracuda management, when prompted on the CC, noted that it does not have substantial exposure to emerging markets.
- PR, supplemental presentation
CUDA vs. ETF Alternatives
Barracuda Networks, Inc. designs and delivers security and storage solutions. It offers cloud-connected solutions that help customers address security threats, improve network performance and protect and store data.
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