There’s lots of competition for the big boys from more nimble startups and enterprises have shown willing to buy from outside the top 3 cybersecurity firms….:
Cybersecurity stocks fell for a second week in a row, as earnings beats and raised outlooks did little to boost prices in a sector that some believe is overpriced.
The ETFMG Prime Cyber Security ETF HACK, -0.61% has fallen 4.9% since the first earnings report of one of its components, Check Point Software Technologies Ltd. CHKP, +0.01% , on July 25. Other components of the ETF include Cisco Systems Inc. CSCO, +0.71% , which is scheduled to report earnings Aug. 15, and Palo Alto Networks Inc. PANW, -0.91% , whose quarterly report is scheduled scheduled for Sept. 6.
The First Trust Nasdaq Cybersecurity ETF CIBR, -0.64% is down 4.3% over the same period.
Following the declines, the HACK ETF is up 17.5% on the year and the CIBR ETF is up 14.4%, compared with a 6.2% gain for the S&P 500 index SPX, +0.46% and a 13.2% gain for the tech-heavy Nasdaq Composite Index COMP, +0.12% . On Friday, both ETFs put weekly declines on the books for a second straight week.
Shares of Symantec Corp. SYMC, -7.81% were among the sector’s biggest losers on the week after the company reported weaker-than-expected outlook and billings and said an internal audit was still ongoing. Symantec shares finished the week down 7.1% at $19.25, after a 7.8% decline Friday. Of the 29 analysts who cover Symantec, two have buy ratings on the stock, 25 have hold ratings, and two have sell ratings. Following earnings, analysts’ average share-price target fell to $21.05 from $23.36, according to FactSet data.
Cowen analyst Gregg Moskowitz, who has an underperform rating on the stock, called it “another highly disappointing quarter” for Symantec. Jefferies analyst John DiFucci, who has a hold rating, said the company faces notable challenges in its enterprise business, namely its SEP 14 endpoint protection product and the Blue Coat Secure Web Gateway business.
In a note, DiFucci said “in endpoint, the company faces a multitude of private upstarts as competitors offering modern solutions that are competitive with SEP 14. Similarly, in the Secure Web Gateway market, the company continues to face direct competition from companies such as Zscaler and iboss, and indirect competition from the next-generation firewall vendors offering URL filtering functionalities that are considered ‘good enough’ to meet the needs of some enterprises.”