Summit Research Initiates Coverage On Proofpoint

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Summit Research initiated coverage on Proofpoint Inc PFPT Monday with a Buy rating and $58 price target.

“Proofpoint solutions for email security, privacy and archiving are considered some of the best in the industry and not surprisingly the company has been taking share from incumbent players. The company continues to execute well, and has beat the consensus revenue estimates during each of the last eleven quarters (by an average of 6 percent),” according to analyst Srini Nandury.

Following Nandury’s “conversations with industry participants, and after delving deeper into its core Machine learning technology (MLX),” the firm believed “Proofpoint will continue to gain share against incumbent vendors for the next several years. Proofpoint deserves a premium multiple, in our view, given that its solutions adapt to morphing threats and its continued investments in R&D should sustain its edge as an effective security solution for the foreseeable future.”

Nandury also thought the company would see mid-to-high 20 percent CAGR over the next 3 to 5 years and that international revenue would grow.

The $58 price target was based on a 7.0x multiple on EV/C2016 sales.

Proofpoint Inc closed at $50.02 Tuesday, down 0.54 percent.
 

Posted In: Price TargetInitiationAnalyst RatingsSrini NandurySummit Research
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