Proofpoint Has Upside On High-Profile Cyber Attacks

Summit Redstone Partners’ Srini Nandury believes Proofpoint Inc PFPT continues to benefit from the constant outpouring of news associated with high profile email hacks, which has been “driving a sense of urgency with CIO/CSOs.”

Nandury reinitiated coverage of the company with a Buy rating and price target of $90.

Best In The Industry

“Proofpoint solutions for email and social media security, privacy and archiving are considered some of the best in the industry and not surprisingly the company has been taking share from incumbents,” the analyst mentioned.

Nandury believes the company continues to execute well, having beaten the consensus revenue expectations for each of the past 18 quarters.

Proofpoint’s solutions offer protection against threats delivered either through mobile devices or the cloud and can be deployed in the cloud. This makes them cheaper, as well as scalable and easier to deploy than the traditional on-premises solutions.

Related Link: All Of Imperial Capital's Cybersecurity Coverage Ahead Of Earnings

Increasing TAM

“Proofpoint continues to increase its TAM to adjacent areas such as eDiscovery, Advanced Threat Protection etc. In addition, its continued R&D investments should sustain its edge as an effective security solution for the foreseeable future,” the analyst stated.

In addition, Nandury pointed out that Intel Corporation INTC's exit from the on-premises email security business in 2015 has provided Proofpoint additional growth opportunities.

According to the Summit Redstone report, “On a conservative basis, the opportunity could be 2–3x or $200–300 million in total, given that Proofpoint can sell a whole slew of interlocking products.”

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