Thu, Nov. 5, 12:47 PM
- Fortinet (FTNT -4.2%), Barracuda (CUDA -3.9%), Vasco (VDSI -1.9%), Proofpoint (PFPT -4.6%), and KEYW (KEYW -6.3%) have joined the ranks of enterprise security tech firms selling off in the wake of FireEye's Q3 revenue/billings miss, soft Q4 sales guidance, and full-year billings guidance cut.
- Other decliners include Palo Alto Networks, CyberArk, and Rapid7. FireEye itself is down 23%.
- Also: PC/mobile security software firm AVG is down 17.7% after missing Q3 estimates and providing light Q4 guidance. Symantec is up slightly following an FQ2 EPS beat.
- The PureFunds ISE Cyber Security ETF (HACK -3.1%) has fallen below $27. CyberArk reports after the bell.
- Update: FBR's Daniel Ives is defending the group. "Importantly, we note that nearly every major cybersecurity player (Check Point, Imperva, Proofpoint, Palo Alto, Fortinet) recently has delivered strong results across the board with a healthy outlook ... We continue to strongly believe that FireEye's issues are much more company-specific as DeWalt & Co. are dealing with a plethora of execution/product headaches in the field, which are major overhangs on the FireEye story heading into 2016. We continue to see white-hot cybersecurity spending, which we view as a 30%+ growth area in a 2%–3% overall IT landscape as the threat landscape escalates. We would be strong buyers of the cybersecurity basket, with PANW, PFPT, and CHKP front and center."
Fri, Oct. 30, 12:15 PM
- Imperva (NYSE:IMPV) beat Q3 estimates and forecast Q4 revenue of $66M-$68M and EPS of $0.10-$0.16, above a consensus of $62.3M and -$0.06. Moreover, on the earnings call (transcript), the Web app firewall and database security software vendor set initial 2016 revenue growth guidance of "at least 25%," above a 24% consensus. (earnings release)
- With strong corporate IT security spend providing a lift, product/license revenue rose 55% Y/Y in Q3 to $30.5M, and services revenue 43% to $32.9M. Within services, subscription revenue grew 93% to $12.3M. $100K+ deals rose to 130 from 106 a year ago. 188 new customers were added, and Fortune 1000 penetration stands at 13%.
- The Americas (revenue +86% Y/Y) are driving most of Imperva's growth. EMEA (revenue +9%, hurt by a weak euro) and Asia-Pac (-3%) are softer. Opreating expenses (non-GAAP) rose 23% Y/Y to $28.5M, falling to 45% of revenue from 54% a year ago.
- Next-gen firewall leader Palo Alto Networks (PANW +2.5%), privileged account security software leader CyberArk (CYBR +4.4%), SaaS threat-protection/compliance software vendor Proofpoint (PFPT +3.4%), and security/storage appliance vendor Barracuda (CUDA +3.2%) are following Imperva higher. The Nasdaq is nearly flat.
- CyberArk reports on Nov. 5; Proofpoint delivered a Q3 beat and strong guidance last week. Barracuda directly competes with Imperva in the Web app firewall market, while Palo Alto's next-gen firewalls indirectly compete.
Wed, Oct. 21, 6:57 PM
- Proofpoint (NASDAQ:PFPT) has risen to $62.50 after hours after beating Q3 estimates and reporting billings of $85M (+37% Y/Y), above revenue of $69.1M, and above guidance of $76M-$78M.
- Q4 guidance is for revenue of $72.5M-$73.5M and EPS of -$0.11 to -$0.12 vs. a consensus of $70.6M and -$0.10. Billings are expected to total $90M-$92M. Also: Proofpoint used its earnings call to set an initial 2016 revenue growth guidance range of 29%-30%, above a 27% consensus.
- GAAP operating expenses rose 52% Y/Y to $70M, with $40.1M spent on sales/marketing. With billings topping revenue, free cash flow was $16.2M in spite of a $2.5M net loss.
- Security software peer Imperva (NYSE:IMPV) is up 1.7%. Both Proofpoint and Imperva sold off in regular trading as part of a broader cybersecurity stock rout.
- Q3 results, PR
Wed, Oct. 21, 5:39 PM
Wed, Oct. 21, 12:34 PM
- Several security tech plays, including ones that were tech sector darlings earlier this year as a torrent of hacking incidents led corporate cybersecurity spend to jump, are selling off on a quiet day for equities.
- Major decliners include Palo Alto Networks (PANW -4%), FireEye (FEYE -4.9%), Fortinet (FTNT -4.3%), CyberArk (CYBR -4.8%), Imperva (IMPV -5.3%), Proofpoint (PFPT -3.9%), Qualys (QLYS -2.8%), and Rapid7 (RPD -6.8%).
- No major news has arrived to trigger a selloff. Meanwhile, hacking-related stories have continued producing ink in recent weeks. Notable ones: China is reportedly continuing hacking attacks on U.S. firms in spite of a pact that banned government spying on companies; authorities are probing a potential Russian hack of Dow Jones; and ISIS has reportedly tried (without much success) to hack the U.S. electrical grid.
- The PureFunds ISE Cyber Security ETF (HACK -1.6%) is down 24% from a June peak of $33.91. YTD, it's only down modestly.
- Proofpoint reports earnings after the close, and Fortinet tomorrow afternoon. Qualys reports on Nov. 2, FireEye on Nov. 4,, CyberArk on Nov. 5,, and Rapid7 on Nov. 12,
- Update: One potential culprit: Server virtualization software leader VMware is cratering due to its soft Q4/2016 guidance (partly blamed on cloud adoption). A smattering of other high-beta enterprise tech names are also selling off.
Thu, Aug. 6, 3:56 PM
- Security tech names are among the big decliners (HACK -2.7%) on a day the Nasdaq is off 1.6%. Various other high-beta tech names are also hard-hit.
- Major decliners include Palo Alto Networks (PANW -8.1%), Fortinet (FTNT -4.5%), AVG (AVG -8.1%), Proofpoint (PFPT -4.1%), and newly-public incident-detection/threat-response software firm Rapid7 (RPD -5.7%). Qualys is down 13.5% today after filing its Q2 10-Q.
- Rapid7 is now down 25% from its July 17 opening trade of $26.75, albeit still up 25% from its $16 IPO price. AVG is adding to the 2.5% decline seen yesterday after the company posted a slight Q2 EPS beat, hiked full-year revenue guidance by $10M to $420M-$440M, and reiterated EPS guidance of $1.80-$1.90.
- An afternoon report that the Pentagon has been the victim of a "sophisticated cyberattack" launched by Russia hasn't done much to lift the group. NBC News reports the attack "relied on some kind of automated system that rapidly gathered massive amounts of data and within a minute distributed all the information to thousands of accounts on the Internet." Officials believe it to be "the work of a state actor."
Thu, Jul. 23, 11:27 AM
- As was the case 3 months ago, security tech plays are up strongly (HACK +3.6%) after Fortinet (FTNT +12%) beat estimates, reported strong billings, and delivered above-consensus top-line guidance. The Nasdaq is up 0.3%.
- In addition to FireEye, Palo Alto Networks, and CyberArk (previously covered), gainers include Barracuda Networks (CUDA +6.4%), KEYW Holding (KEYW +4.5%), Symantec (SYMC +1.9%), Imperva (IMPV +7.6%), Proofpoint (PFPT +3.6%), Vasco (VDSI +4.5%), AVG (AVG +3.1%), and Qualys (QLYS +5.7%). AVG is benefiting a bullish JPMorgan coverage launch; Proofpoint reports after the close.
- JPMorgan's Sterling Auty has upgraded Fortinet to Overweight, and a slew of firms have hiked their targets. Auty argues Fortinet's numbers suggest its efforts to grow its high-end presence (aided by major sales investments in recent years), and forecasts free cash flow will rise 43% this year.
- On Fortinet's earnings call (transcript), CFO Drew Del Matto mentioned $100K+ deals rose 53% Y/Y and $1M+ deal 133% (compares with 40% total billings growth). He also mentioned the company's high-end FortiGate UTM/next-gen firewall appliances made up 45% of billings (a new high), and that U.S. enterprise sales (benefiting from strong cybersecurity spend) rose 90%. Major deals were struck with "two of the most recognizable technology brands in the world," as well as two large i-banks.
Thu, Jul. 9, 2:26 PM
- Security tech plays are outperforming amid a 0.4% gain for the Nasdaq. The rally comes a day after the NYSE suffered a lengthy outage, United Airlines grounded flights, and the WSJ's site briefly went down.
- All three incidents have been blamed on tech issues rather than attacks/breaches, but questions linger. FBI director James Comey: "We do not see any indication of a cyber breach or cyber attack ... But again, in my business, you don't love coincidences." Ex-White House cybersecurity advisor Richard Clarke: "Right now, anybody who says they know for sure what happened before the forensic work has been done is kidding themselves."
- Also: In a bit of good PR/convenient timing for the group, representatives from the PureFunds Cyber Security ETF (HACK +1.6%) rang the NYSE's opening bell today. The NYSE says the event was booked months in advance.
- Standouts include CyberArk (CYBR +4%), FireEye (FEYE +2.7%), KEYW Holding (KEYW +5%), Fortinet (FTNT +2.4%), Check Point (CHKP +2.6%), Imperva (IMPV +2.9%), Zix (ZIXI +2.8%), Proofpoint (PFPT +2.7%), and Vasco (VDSI +2.5%). Barracuda (CUDA +2%) reports after the bell.
Wed, Jun. 24, 11:54 AM
- Baird has downgraded Fortinet in response to a healthy 2015 run-up, and many security tech peers have joined the company in seeing profit-taking (HACK -1.3%). The Nasdaq is down just 0.1%.
- Decliners include FireEye (FEYE -2.3%), Qualys (QLYS -6.7%), KEYW (KEYW -5.1%), Check Point (CHKP -1.9%), Barracuda (CUDA -2.5%), Vasco (VDSI -2.5%), and Proofpoint (PFPT -1.8%). UBS downgraded FireEye to Neutral two days ago while citing valuation, and also cut Symantec to Sell. RBC has hiked its Qualys target by $6 to $44 today, while reiterating a Sector Perform.
- The selloff comes as an Office of Personnel Management (OPM) official states up to 18M Social Security numbers may have been stolen in a recent breach. FireEye recently ID'd a Chinese group it believes was responsible for the hack.
- Meanwhile, the WSJ has published a column about Check Point's efforts to expand beyond its core firewall market, and thereby keep the likes of Fortinet and Palo Alto Networks at bay. Gartner estimates Check Point had a 22.7% 2014 firewall share, well above #2 Cisco's (NASDAQ:CSCO) 15.9% but down from a 2013 share of 24%.
Mon, Jun. 15, 3:42 PM
- Though the Nasdaq is down 0.4%, security tech plays CyberArk (CYBR +7%), FireEye (FEYE +2.6%), Proofpoint (PFPT +4.1%), Zix (ZIXI +2.8%), Vasco (VDSI +5.7%), and Qualys (QLYS +4.7%) are turning in strong days. All of the names except for Proofpoint and Qualys have made new 52-week highs ... and Proofpoint is less than a dollar away from doing so.
- No major news is propelling the gains, but the massive federal personnel records hack first disclosed on June 4 continues to get plenty of media and political attention. Meanwhile, Russia's Kaspersky Lab has reported hackers used an updated version of the Duqu virus (linked to Israel) and a digital certificate from contract manufacturer Foxconn to spy on Iranian nuclear talks.
- ETF: HACK
Fri, Jun. 5, 12:56 PM
- The PureFunds ISE Cyber Security ETF (HACK +2.2%) has made fresh highs after government officials disclosed a hack of the federal Office of Personnel Management (OPM) that resulted in the personal records of as many as 4M current and former federal workers being stolen. The Chinese hackers who carried out for a recent attack on health insurance firms Anthem and Premera Blue Cross are believed to be responsible.
- In addition to FireEye, Palo Alto Networks, and CyberArk (previously covered), gainers include Imperva (IMPV +3.7%), KEYW Holding (KEYW +7.5%), Fortinet (FTNT +2.3%), Proofpoint (PFPT +4.3%), Vasco (VDSI +3%), and Identiv (INVE +2.8%). Fortinet, Proofpoint, and Imperva have made new highs. The Nasdaq is close to breakeven.
- The group also rallied on Wednesday, a day after the IRS promised to upgrade its security systems during Senate hearings about a recent breach. Proofpoint is a day removed from announcing a refresh (version 3.0) of its threat-response/intelligence software platform. New features include better cloud-based threat intelligence tools and security alert integration for 3rd-party software tools.
Wed, Jun. 3, 6:39 PM
- The PureFunds ISE Cyber Security ETF (NYSEARCA:HACK) rose 2.5% today to $31.13, making new highs in the process. The media attention given to a Tuesday Senate hearing about a recent IRS breach, along with the IRS' promise to upgrade its security systems in response, may have helped.
- Major security tech gainers included KEYW Holding (KEYW +7.6%) and Vasco (VDSI +5.4%), each of whom have healthy government exposure. Others included Qualys (QLYS +3.8%), AVG (AVG +3.5%), Imperva (IMPV +3.3%), and Proofpoint (PFPT +2.9%).
- After the bell, FireEye announced a partnership with Visa to provide a joint threat-intelligence service to Visa merchants and card issuers.
Tue, May 5, 10:32 AM
- Though Qualys (QLYS -28.8%) beat Q1 EPS estimates and only slightly missed on revenue, it's guiding for Q2 revenue of $39.5M-$40M and EPS of $0.09-$0.11, below a consensus of $40.7M and $0.13. Full-year guidance is for revenue of $165M-$166.5M and EPS of $0.50-$0.55 vs. a consensus of $168.4M and $0.53.
- Security tech peers are underperforming (HACK -2.9%) amid a 0.8% drop for the Nasdaq. Decliners include CyberArk (CYBR -3.6%), FireEye (FEYE -2.5%), Palo Alto Networks (PANW -2.9%), Proofpoint (PFPT -3.8%), and AVG (AVG -2.3%).
- Discussing its light full-year outlook, Qualys says it now expects "a lower growth rate for our Vulnerability Management business than we did at the beginning of 2015" The growth rate for other products is said to be unchanged.
- On the CC (transcript), Qualys noted Vulnerability Management (provides cloud-based tools for detecting and fixing IT vulnerabilities) still accounts for nearly 80% of revenue, and that business' Y/Y sales growth slipped to 19% in Q1 from 20% in Q4 thanks to "the timing of a few large enterprise deals." With shares up over 3x from their 52-week lows going into earnings, there was little margin for error.
- Baird has gone contrarian and upgraded Qualys to Outperform following the rout. Baird, which maintains a $50 target, sees new products/services will boost growth. Qualys launched a cloud-based IT asset monitoring service last month, as well as a service for securing Web apps.
- FireEye and CyberArk are giving back some of the big Friday gains seen following FireEye's Q1 beat and full-year guidance hike.
Tue, Apr. 21, 1:35 PM
- Security tech firms are rallying once again (HACK +2.3%) after unified threat management (UTM) hardware leader Fortinet (FTNT +9.6%) beat Q1 estimates on the back of 36% Y/Y billings growth, and provided strong Q2 and full-year sales/billings guidance. At least 8 firms have hiked their Fortinet targets in response to the numbers, which followed a Q1 beat and in-line guidance from firewall vendor Check Point.
- In addition to FireEye, which announced an HP partnership this morning (follows a Check Point partnership), gainers include Palo Alto Networks (PANW +4.8%), CyberArk (CYBR +5.1%), Barracuda Networks (CUDA +5.1%), Qualys (QLYS +4.7%), Imperva (IMPV +2.2%), Proofpoint (PFPT +2.6%), and Zix (ZIXI +3.5%). Proofpoint and Zix report after the close, Barracuda on April 27, Qualys and Imperva on May 5, and CyberArk on May 7.
- "Fortinet is ... benefiting from a favorable security environment and increasing opportunity to sell to organizations that are building a multilayered approach to security," observes William Blair in remarks that also have implications for peers. "U.S. enterprise growth was 70% year-over-year with the company adding a total of 8,000 new customers, suggesting increasing traction." FBR (a long-time security tech bull) sees profit growth (currently pressured by heavy spending) improving as sales/marketing investments pay off.
- On the CC (transcript), CEO Ken Xie asserted Fortinet's ability to offer an integrated security platform covering "internal, data center, perimeter, and endpoint security plus advanced threat protection" was a differentiator. CFO Andrew Del Matto claimed FortiGate UTM/next-gen firewall appliance deals were over Palo Alto, Check Point, Cisco, and Juniper; those companies, of course, might claim wins of their own.
Mon, Apr. 13, 4:44 PM
- A Q1 Piper survey of security resellers found of 54% of Palo Alto Networks (NYSE:PANW) resellers stating their sales were above plan during the quarter, the highest figure among 10 covered firms. 19% were below plan, and 27% in-line.
- Piper notes Palo Alto's above-plan reading was its highest since Q4 2013, and that it also "had the highest percent of resellers expecting above normal seasonality in Q2 (June) with 60 percent."
- FireEye (NASDAQ:FEYE) had the second-best numbers: 43% of resellers were above plan, 21% below, and 36% in-line. 20% expect Q2 to be above normal seasonality. Barracuda (NYSE:CUDA) was third on Piper's list with 25% above plan, 13% below, and 63% in-line.
- ProofPoint (NASDAQ:PFPT) was a laggard: 56% of resellers were below plan, 44% in-line, and none above. Moreover, the net difference between above-plan and below-plan resellers (-56%) represented a sharp reversal from Q4's +20%. A silver line: 33% of resellers expect above-normal Q2 seasonality.
- Fortinet (NASDAQ:FTNT) was also soft: 13% of resellers were above plan vs. 38% below and 50% in-line. Its net difference fell to -25% from Q4's +6%. Imperva (NYSE:IMPV) had 29% below plan, 71% in-line, and none above; however, its net difference (-29%) was only a little worse than Q4's -20%.
- ProofPoint fell 6.6% today, and Fortinet fell 3.8%. But other security tech plays also sold off. FireEye fell 3.2%, giving back some of the Friday gains seen in anticipation of a 60 Minutes appearance. Symantec (-25% net difference in Piper's survey) fell 5.7% as more details emerged about the company's reported efforts to sell its storage software unit (led shares to spike on Friday).
- Palo Alto fell 1.9%, giving back some of its recent gains. Imperva avoided the selloff, closing down just 0.2%.
- ETF: HACK
Wed, Apr. 1, 2:57 PM
- Several security tech plays are seeing profit-taking on a down day for tech. Palo Alto Networks (PANW -4.3%), FireEye (FEYE -3.4%), Imperva (IMPV -3.5%), Fortinet (FTNT -3.1%), and Proofpoint (PFPT -3%) are the biggest decliners.
- The decline comes as Pres. Obama announces an executive order authorizing "targeted sanctions against individuals or entities whose actions in cyberspace result in significant threats to the national security, foreign policy, economic health or financial stability of the United States."
- Obama, whose administration has already rolled out several executive actions/proposals aimed at helping businesses and government agencies defend against security breaches, goes as far as to call cyberattacks a "national emergency." His latest move comes 3 months after a massive Sony Pictures hack blamed on North Korea.
- ETF: HACK
- Yesterday: Palo Alto expands VMware alliance, launches new service
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