Sell Side Resoundingly Positive On Mimecast Shares

Mimecast Ltd MIME was initiated a Buy coverage by Jefferies on Monday. The cybersecurity went public in 2015 and is working to pursue a significant opportunity to secure, ensure and archive organization's email with a scalable, unified SaaS solution. Jefferies rated the stock at Buy, with an $18 price target.

Barclays

Barclays initiated Overweight coverage and a $13 price target for Mimecast; the price target was set to $15 on Friday.

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RBC Capital Markets

Jefferies

RBC Capital Markets highlighted numerous growth drivers, including:

• Attractive end-markets of email security, archiving and continuity – as email is often one of the larger threat vectors into an organization
• Competitive share shifts from Intel/ McAfee, Symantec/Veritas and Cisco
• The migration to cloud-based email services such as Office 365
• Growing customer base more quickly than expected
• Cross-sell products, such as Target Threat Protection back into the install base
• The introduction of new products
• Enhanced global distribution capabilities

Mimecast has an attractive high visibility model with demonstrated profitability. "MIME's SaaS model with enterprise class retention rates delivers very high visibility, and it's already demonstrated profitability. We estimate that about 90 percent of FY15 revenue was known exiting FY14," the firm said in an analyst note. Jefferies sees its platform as an enabler to expansion into adjacent markets, fueling growth.

The company has a highly efficient, extensible platform, which Jefferies sees as driving meaningful growth. Mimecast has enterprise class retention and delivers high visibility. For investors, the issue also has demonstrated profitability. Its valuation is composed of major dislocation with the intrinsic value of its existing subscription.

Mimecast shares closed at $10.42 on Friday and were recently seen trading at $10.07 in Monday's afternoon session.