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PacCrest: Buy These IT Security, Infrastructure Picks In H2

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PacCrest: Buy These IT Security, Infrastructure Picks In H2
  • Since mid-July, security and infrastructure names have taken a large hit. Barracuda Networks Inc (NYSE: CUDA) and Palo Alto Networks Inc (NYSE: PANW) are down nearly 20 percent, while Imperva Inc (NYSE: IMPV) has lost 18 percent and Box Inc (NYSE: BOX) dipped 14 percent.
  • Pacific Crest's Rob Owens believes there are "selective opportunities" in security and infrastructure, identifying Barracuda Networks, Imperva, and Palo Alto Networks in security and Box in infrastructure as "top picks."
  • Owens suggested that companies will continue to prioritize security spend, particularly as "increased breach activity and the loss of intellectual property, financial information and personally identifiable information have run rampant over the past few years."

The Ashley Madison hack is just the latest. Every day, it seems, headlines describe stories where the latest company has been hacked, with user information compromised.

"It's only half-time," analyst Rob Owens argued in a note that forecasts a good H2 for select IT security and infrastructure names. The firm's top picks: Barracuda Networks, Imperva and Palo Alto Networks in security and Box in infrastructure.

The note follows PacCrest's 17th Annual Global Technology Leadership Forum, which left the analysts with "more clarity around certain key trends […] and greater optimism as we prepare for increased momentum" in H2. Notably, Owens said, security emerged as "one of the highest priorities for boards and C-suites." These panelists noted that the "task of securing their organizations is far from over." That should support gains in Palo Alto Networks, Imperva, and Barracuda Networks.

Year-to-date, these companies have had mixed performance, though all are down sharply in the past month. As of Friday's close, Palo Alto Networks and Imperva gained 30 and 19 percent in 2015, while Box and Barracuda Networks have lost 40 and 33 percent, respectively.

Those losses, at least in Box, mean that the stock is finally at a "compelling risk/reward" setup. PacCrest has a $24 price target on Box and an $80 price target on Imperva.

Latest Ratings for CUDA

DateFirmActionFromTo
Jan 2018DowngradesOutperformNeutral
Dec 2017DowngradesOverweightNeutral
Nov 2017DowngradesOverweightSector Weight

View More Analyst Ratings for CUDA
View the Latest Analyst Ratings

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