Thu, Mar. 26, 2:44 PM
- Though the Nasdaq is nearly flat today, many security tech plays are rallying. CyberArk (CYBR +4.6%) is a standout, adding to Monday's post-lockup gains. So are Qualys (QLYS +4.7%), Vasco (VDSI +3.8%), and Proofpoint (PFPT +4.3%). Palo Alto Networks (PANW +1.8%), Fortinet (FTNT +1.9%), and Imperva (IMPV +2.2%) are up more moderately.
- Possibly helping the group: The House Intelligence Committee has unanimously passed a cybersecurity bill that will make it easier for companies to share information about attacks without risking lawsuits. A full House vote could happen by late April, and the Senate is working on a similar bill. The White House recently floated its own cybersecurity initiatives.
- Yesterday, FBR's Daniel Ives (bullish on the space for some time) forecast spending on "next-generation" security solutions will rise 25% this year, up from a prior 20% estimate. He thinks less than 10% of companies have fully invested in next-gen offerings, and sees evidence of a "surge in deal flow with a major upgrade cycle underway in 2015, as enterprises and governments 'fast track' cybersecurity initiatives across the board."
- Ives expects FireEye (FEYE +0.7%), Palo Alto, Fortinet, and Proofpoint to benefit from the trend, which he isn't sqeamish about hyping. "This once-in-a-multi-decade upgrade opportunity is poised to be a rising tide for all security boats ... with legacy security solutions no longer 'good enough' and next-generation products well positioned to replace traditional firewall and endpoint vendors over the coming years."
- ETF: HACK
- Previously: Three cybersecurity companies reportedly planning $1B+ IPOs
Tue, Mar. 10, 2:55 PM
- Security tech plays, several of which were huge gainers in February, have been hard hit (HACK -2.6%) amid a market selloff. Major decliners include FireEye (FEYE -4%), CyberArk (CYBR -6.6%), Proofpoint (PFPT -4.7%), and Vasco (VDSI -5.5%). Imperva is off sharply after announcing a 3M-share offering.
- FBN Shebly Seyrafi reiterated his bullish stance on the group today, forecasting security IT spend will grow 14% this year (up from 2014's 11%). Palo Alto Networks (PANW -0.5%) and Fortinet (FTNT -2.4%) are his favorites due to positive checks, but he also likes other names, mentioning FireEye and Check Point (CHKP -0.2%) in particular. Palo Alto and Check Point are seeing only modest losses.
- Earlier today, Check Point launched Threat Extraction, a malware-protection tool that proactively extracts and reconstructs documents traveling over a network with known safe elements (so as to remove the threat of malware). The product launch, which furthers Check Point's efforts to grow its software exposure, follows the company's purchase of threat-prevention software startup Hyperwise.
Thu, Feb. 5, 11:46 AM
- A major data breach at #2 U.S. health insurer Anthem - it involves a database containing personal info about 80M customers/employees - has put cybersecurity back in the spotlight ... along with the companies providing hardware, software, and services to protect against external attacks.
- FireEye (FEYE +5.6%), whose Mandiant endpoint protection/incident response unit has been hired by Anthem to investigate the breach, is among today's gainers. Mandiant was also hired by Sony following its breach; JPMorgan writes today FireEye/Mandiant has become the "go-to" for probing high-profile attacks.
- Other security tech plays rallying today include CyberArk (CYBR +6.5%), Vasco (VDSI +6.1%), Fortinet (FTNT +2.3%), Proofpoint (PFPT +2.6%), Imperva (IMPV +3%), Qualys (QLYS +2.7%), and Barracuda (CUDA +2.5%). The Nasdaq is up 0.7%.
- ETF: HACK
- Previously: Wilson predicts cybersecurity budgets will "explode" in 2015
- Update (3:40PM): Bloomberg reports investigators probing the Anthem breach are "pursuing evidence that points to Chinese state-sponsored hackers who are stealing personal information from health-care companies for purposes other than pure profit."
Thu, Jan. 29, 12:22 PM
- In addition to beating Q4 revenue estimates (while posting in-line EPS), Fortinet (NASDAQ:FTNT) guided on its CC (transcript, earnings slides) for Q1 revenue of $200M-$205M and full-year revenue of $915M-$925M (+20% Y/Y at the midpoint), above consensus estimates of $199.1M and $877.8M. But EPS guidance is respectively at $0.06 and $0.49-$0.50, below consensus estimates of $0.12 and $0.59.
- GAAP operating expenses rose 40% Y/Y in Q4 to $138.4M ($93.2M on sales/marketing), outpacing revenue growth of 26% and billings growth of 35%, and preventing an EPS beat. CFO Andrew Del Matto states Fortinet's investments are focused on "strengthening our enterprise sales force including key vertical teams as well as increased marketing to improve our lead generation and sales productivity."
- Q4 billings totaled $283M, soundly exceeding guidance of $245M-$250M. Q1 and full-year billings guidance is respectively at $226M-$230M (+22% at the midpoint) and $1.065B-$1.08B (+20%). The deferred revenue balance rose 29% Y/Y in Q4 to $558.8M.
- Strong billings growth led 2014 free cash flow to total $164.4M, more than 2x net income of $80.8M. Fortinet's high-end FortiGate UTM and next-gen firewall appliances (the 1000, 3000, and 5000 series') made up 40% of product billings.
- FireEye (FEYE -2.9%), Imperva (IMPV -2.2%), and CyberArk (CYBR -2.7%) are following Fortinet lower; Imperva reports on Feb. 5, FireEye on Feb. 11, and CyberArk on Feb. 12. FireEye announced a partnership with major European/Latin American carrier Telefonica this morning.
- Check Point has also provided light EPS guidance (to go with strong revenue guidance) due to its aggressive spending plans.
Thu, Jan. 29, 9:12 AM
Wed, Jan. 28, 4:17 PM
Tue, Jan. 27, 5:35 PM| Tue, Jan. 27, 5:35 PM | 4 Comments
Mon, Jan. 26, 9:30 AM| Mon, Jan. 26, 9:30 AM | 1 Comment
Fri, Jan. 2, 12:08 PM
- "Safety used to mean gold, US treasuries, and blue chip stocks. Now it means Google, Apple, Amazon, and Facebook," says high-profile VC Fred Wilson while offering his 2015 predictions. Though believing rising interest rates and low oil prices will trigger "a noticeable flight to safety," he sees major tech firms continuing to have easy access to capital.
- On the other hand, Wilson is cautious on the near-term outlook for the budding wearables market (John Legere feels differently). "Apple Watch will not be the homerun product that iPod, iPhone, and iPad have been. Not everyone will want to wear a computer on their wrist. Eventually, this market will be realized as the personal mesh/personal cloud, but the focus on wearables will be a bit of a headfake..."
- He also expects virtual reality to "hit some headwinds" after getting hyped in 2014 following the Facebook/Oculus (NASDAQ:FB) deal. "Oculus will struggle to ship their consumer version and competitive products will underwhelm. The virtual reality will eventually catch up to the virtual hype, but not in 2015."
- He forecasts cybersecurity budgets "will explode in 2015 as every company, institution, and government attempts to avoid being Sony’d." But Wilson also thinks "the hacks will continue because on the open internet there is no such thing as an impenetrable system." Cybersecurity plays: FEYE, PANW, FTNT, IMPV, QLYS, PFPT.
- Wilson, a long-time Bitcoin (COIN, OTCQB:BTCS) believer, once more defends the cryptocurrency. "The horrible year that bitcoin had in 2014 will be a wakeup call for all stakeholders. Developers will turn their energy from creating the next bitcoin (all the alt stuff) to creating the stack on top of the bitcoin blockchain. Real decentralized applications will start to emerge..."
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Dec. 18, 2014, 11:13 AM
- FireEye (FEYE +4.9%), recently hired by Sony to probe its massive hacking incident, is rallying strongly on an up day for equities after Sony cancelled The Interview's release in response to the hack and subsequent threats on movie theater chains.
- Other security tech names are also outperforming: PANW +3.2%. KEYW +3.9%. FTNT +2.6%. PFPT +3.2%. Imperva (IMPV +2.6%) is adding to the Wednesday gains it saw following a Deutsche upgrade.
Oct. 23, 2014, 12:03 PM
- Check Point (CHKP +4.2%) beat Q3 estimates and offered healthy Q4 guidance: Revenue of $395M-$430M and EPS of $0.99-$1.09 vs. a consensus of $410.3M and $1.03.
- Fortinet (FTNT -0.1%) posted a Q3 beat, reported strong billings growth, and issued above-consensus Q4 revenue guidance. EPS guidance was light due to aggressive spending.
- Several security tech peers are outperforming on a day the Nasdaq is up 1.7%. PANW +4.4%. FEYE +4.5%. PFPT +4.9%. QLYS +2.7%. The numbers follow downbeat guidance from IBM, SAP, and VMware, and arguably highlight security's growing share of IT spend.
- Oppenheimer is reiterating an Outperform and $30 target on Fortinet, and notes the company's new billings guidance implies 26% 2014 growth at the midpoint (up from 22%). It thinks the UTM hardware vendor's performance is being driven by strong high-end appliance sales, product refreshes, and the fruits of major sales/marketing investments.
Oct. 22, 2014, 7:00 PM
- Fortinet (NASDAQ:FTNT) guides in its Q3 earnings CC slides (.pdf) for Q4 revenue of $206M-$211M and EPS of $0.13-$0.14 vs. a consensus of $202.9M and $0.15.
- Q3 billings totaled $213M, +29% Y/Y, above guidance of $195M-$200M, and above revenue of $193.4M. Q4 billings guidance is at $245M-$250M.
- Free cash flow was $51M in Q3, much better than net income of $20M. The reason: Fortinet's deferred revenue balance rose 4% Q/Q and 25% Y/Y to $500M. 35 $500K+ deals were inked, up from 19 a year ago.
- Products were 45% of revenue, and services/other 55%. GAAP opex rose 31% to $121M, keeping a lid on EPS. From the looks of things, opex will grow strongly in Q4 as well.
- FTNT +1.5% AH. Q3 results, PR
Oct. 22, 2014, 4:18 PM
Oct. 21, 2014, 5:35 PM
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Oct. 6, 2014, 12:28 PM
- Morgan Stanley's Keith Weiss has downgraded Fortinet (FTNT -3.1%) to Equal-weight, albeit while keeping his $29 target.
- Though admitting the UTM security hardware vendor's big sales/marketing and R&D investments are bearing fruit, Weiss doesn't like the face sales productivity (as measured by the ratio of product billings to sales/marketing spend) has been declining over the last 6 quarters.
- He adds sustaining Fortinet's current billings growth could be challenging in 2015. Fortinet has guided for 22% 2014 billings growth.
- Peers Palo Alto Networks (PANW -2.3%) and FireEye (FEYE -3%), both of whom have also been making big sales investments, are also lower. Palo Alto received a bullish Piper note on Friday, while FireEye was hit by a Northland Securities downgrade.
Oct. 3, 2014, 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.
Fortinet Inc is provider of network security solutions that are designed to address the fundamental problems of an increasingly bandwidth-intensive network environment and a more sophisticated information technology threat landscape.
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