The one area in all of technology that seems to keep growing and growing is data security and security software. Not only does the demand increase every day, so do the perceived and real threats that spark the demand. UBS analysts met with the top companies at the recent annual RSA conference, which boasted record attendance this year, and they came away even more convinced of the outstanding growth potential at hand.
The UBS team reports that there is continuing high interest from enterprises around the world, and the discussions centered on everything from sustaining the continued robust demand to the ability to hire qualified talent and the corporate appetite for security analytics to lessen alert fatigue around threat detection. Four top stocks to buy now at UBS are FireEye Inc. (NASDAQ: FEYE), Fortinet Inc. (NASDAQ: FTNT), Palo Alto Networks Inc. (NYSE: PANW) and Splunk Inc. (NASDAQ: SPLK).
FireEye continues to grow, and most Wall Street analysts think it may have resolved its channel conflict with Mandiant, yet its overall performance was somewhat mixed in recent value added reseller survey results. The company did garner 30% of the advanced persistent threat (APT) category, and other Wall Street analysts are very bullish on the prospects.
Earlier this year FireEye announced the new release of FireEye Email Threat Prevention Cloud that adds the traditional email security features of anti-spam and antivirus protection to its advanced threat detection capabilities.
FireEye announced this week a huge partnership with tech giant Hewlett-Packard to develop an advanced suite of network threat detection and analysis software. The two companies said they will develop an industry standard architecture for providing customers with “a blueprint” for threat protection.
UBS has the stock with a strong $50 target price. The Thomson/First Call consensus price target is lower at $43.90, but shares closed Thursday at $43.93.
This top company is well liked on Wall Street, and analysts have pointed to three specific reasons for the bullish posture:
- The large push into enterprise and OMP
- The impact of the improved inventory management
- The new “Easy 4” pricing model released earlier this year that involves a new bundled product sales strategy
Fortinet shareholders were delighted this week as the company posted earnings that beat first-quarter expectations, forecast revenue this quarter higher and raised its full-year outlook above consensus. Wall Street also cheered as the company said the tone of business is very strong, and CEO Ken Xie believes demand for network security software solutions is the strongest “in 20 years.”
The UBS has a price target of $43, and the consensus target is $41.09. Shares closed Thursday at $38.72.
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