Secureworks Has Plenty Of Room To Disrupt The Enterprise Security Market

Secureworks Corp SCWX exhibits a “tech-agnostic approach” to filling the rapidly changing gaps in the Enterprise security market, Morgan Stanley’s Melissa Gorham commented in a report. The analyst initiated coverage of the company with an Overweight rating and a price target of $18.

Proactive Approach To Security

Secureworks seems to be the main beneficiary of enterprises taking new approaches to address security concerns, in view of the rising malicious threats and growth in digital assets, and the current security solutions not proving to be effective enough, analyst Melissa Gorham said. Secureworks has a portfolio of managed security, intelligence and consulting services.

Investors seem to be valuing Secureworks as an IT services company. Gorham pointed out, however, that it was rather proving its value as a broader services and software company. The analyst enumerated the following reasons:

1. Broad exposure to attractive secular trends of security, without the tech specific risk given its agnostic platform
2. Leading but undersized share in the highly fragmented $16B Managed Security market
3. Increased productization of its platform through new subs.

Currently, Secureworks has a share of less than 5 percent in its core market and its positioning within security is becoming increasingly strategic. Continued robust new customer additions, gross margin expansion and better opex leverage are likely to lend upside to the company’s stock, Gorham stated.