Why shareholders are gaming on this cyber-security stock
With cyber-attacks rolling worldwide, government and corporate demand for digital security is high – and only going higher, most experts say. “Digital attacks on entities are increasing in term of sophistication and volume,” notes Scott Kessler, senior equity analyst at CFRA. Certainly, one in 131 emails last year was malevolent, up from one in 220 formerly, according to Symantec (SYMC), which delivers services and security products to help corporations and governments cope with cyber-attacks. It notes that 689 million people around the world were victims of cybercrime last year, and that every two seconds someone is victimized by identity theft. So shares of Symantec have been on the increase, rising to more than $31 a share from around $20 a year ago. CFRA’s Kessler advanced the stock to a “strong buy” from “hold” when it recently dipped due to concerns related to quarterly results posted in May, along with longer-term worries about growth and execution. Kessler, however, sees “substantial potential for cultivating performance and fundamentals, particularly in light of corporate transaction and management changes completed since the beginning of last year.”
Kessler believes Symantec, through a variety of offerings, addresses the needs of companies and government to combat the surging tide of cyber-attacks. The business approximations the total possible market for its products and services at $75 billion — $67 billion for enterprise security and $10 billion for consumer digital safety. In the 2017 fiscal year that ended March 31, Symantec generated $4 billion in revenue. To bolster its products and performance, Symantec has undergone an important transformation since the start of last year, notes Kessler, including the $4.7 billion purchase of Blue Coat, a provider of advanced web-security solutions for global enterprises and governments. And in February, Symantec spent $2.3 billion to acquire Life Lock, a provider of identity theft protection services for consumers and companies that serve consumers.