Wedbush On Enterprise Software: Proofpoint Top Pick For '16

• Proofpoint Inc PFPT shares have appreciated 54.07 percent year to date, with the shares almost at their 52 week high on December 1.
• Wedbush’s Steve Koenig has reiterated an Outperform rating on the company, with a price target of $82.
• Despite the surge in the share price, Koenig has named Proofpoint as Wedbush’s Best Idea for 2016 and favorite Long Term Pick.

Analyst Steve Koenig elaborated, “Although PFPT shares have had a strong run leading up to – and after – its 3Q results, we like the risk/reward balance over the next 12 months.”

The company is currently benefiting from the robust momentum for targeted attack protection (TAP), increasing add-on activity into its base and new customer wins.

Koenig also mentioned that the recent announcement of a partnership between Proofpoint and Intel Corporation’s INTC Intel Security was encouraging. As part of the deal, Intel will exit its email security business, while transitioning its customers to Proofpoint.

According to the Wedbush report, “Over the next 12 months, we think the key to PFPT share price appreciation is increasing visibility into a revenue growth trajectory,” which is expected in the 30-40 percent range and highly achievable, “given rapid adoption of PFPT’s TAP offering, robust sales hiring, and new partnership with Intel.”

Apart from the TAP momentum, the company’s sales has been benefiting from some increase in deal sizes, as compared to the pipeline expectations, along with early closure of some large deals, “increasing contribution from the channel, high win rates across PFPT’s product line, and high renewal rates.”