In the face of a short-selling attack and a subsequent worrying Ernst & Young review earlier this year, British cybersecurity firm Darktrace PLC (LSE:DARK) actually has a lot going for it in the lead-up to its full-year results on 6 September.
In a July trading update, the group said it expects revenue in the year to 30 June 2023 to grow by at least 31% to US$544.2 million with a 29% increase in annual recurring revenue and an 18.3% rise in the number of customers.
Whether or not Darktrace ends up hitting these targets, analysts at Jefferies see the full-year earnings call as a “catalyst for investors to re-visit the equity story” and provide a refreshed valuation for the firm.
“We think Darktrace is well-placed to capitalise on the structural growth in cybersecurity and deliver among the fastest growth rates in the European tech platform,” said the analysts, who also noted that Darktrace is the “fastest-growing company in our coverage”.
Jefferies noted that the cybersecurity market, valued at US$200 billion, is projected to grow with a compound annual growth rate (CAGR) of 9% between 2020 and 2024, and Darktrace operates within some of the fastest-growing segments of this market, specifically network detection and response (NDR) and email security.
“Importantly, we believe Darktrace has a combination of disruptive technology together with a ‘growth-first’ model that should enable the group to take market share and deliver superior growth in the medium term,” said the analysts.
Jefferies has upped its Darktrace target price to 550p from 500p while reiterating a 'buy' rating, with a revenue CAGR of 36% between 2021 and 2024.