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Goldman Is Buying Secureworks, Sees 27% Upside

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Goldman Is Buying Secureworks, Sees 27% Upside

Goldman Sachs' Gabriela Borges initiated Secureworks Corp (NASDAQ: SCWX) at Buy with a price target of $17.50.

"We believe Secureworks is uniquely positioned to gain [market] share at the intersection of two secularly growing verticals: security and IT outsourcing/managed service" Borges said. The analyst cited increased complexity of security infrastructures and a shortage of qualified professionals to manage them as the main catalysts.

Related Link: JPMorgan Initiates Coverage On Secureworks At Overweight, Announces $18.00 PT

Due to these reasons, the Goldman Sachs analyst saw "steady 20+ percent revenue growth while executing on operating leverage" with revenue targets of $420.50 million for 2017. Although the bank estimated EPS to be negative in 2017 and 2018 at $(0.61) and $(0.26) respectively, "we believe 20+ percent EBITDA margins are reasonable" in three to five years.

To reflect the long-term profitability track, Borges estimates a positive EPS of $0.05 for 2019.

Latest Ratings for SCWX

DateFirmActionFromTo
Jan 2021Morgan StanleyMaintainsEqual-Weight
Jan 2021Goldman SachsDowngradesNeutralSell
Dec 2020JP MorganDowngradesNeutralUnderweight

View More Analyst Ratings for SCWX
View the Latest Analyst Ratings

 

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