Canadian firm Magnet Forensics Inc is a stock to watch after strong 3Q results sent its shares up over 17% last week.
The 3Q results come during a particularly steady bull run for Magnet shares, which have risen nearly 43% since the beginning of November – highlighting the strength of its cybersecurity business.
Magnet CEO Adam Belsher told investors that both the public and private sector are prioritizing cybersecurity within their budgets.
“Our global addressable market continues to expand across both verticals, given our solutions address the key challenges our customers are facing such as the increased volume of digital evidence, the rise in cyber-breaches and the scarcity of skilled personnel to handle such challenges,” Belsher said in a release accompanying the 3Q results.
Revenue for the three-month period to end September 30, 2022 grew by 41% year-over-year to $25 million, while adjusted earnings (EBITDA) also grew 25% to $5.9 million.
Sustainable growth demand, says analysts
The firm also upped its 2022 revenue guidance to between $96 to $98 million, representing just under 40% growth over fiscal 2021.
“By leveraging automation, the cloud, and intuitive workflows, Magnet Forensics’ solutions enable our customers to tackle case backlogs and close threat vectors faster,” Belsher added.
Meanwhile, analysts at Laurentian Bank noted that clients are pushing for more practical cybersecurity solutions that can detect potential security risks.
“In our view the results speak for themselves, the sales and EBITDA beat along with the raised guidance, growing pipeline and favourable market environment support our thesis of sustainable growth demand going forward,” analysts noted recently.
That bodes well for smaller Canadian-listed cybersecurity companies as well.
Companies to watch
- Plurilock Security Inc. (TSX-V:PLUR) offers world-class IT and cybersecurity solutions through its Solutions Division, paired with proprietary, AI-driven and cloud-friendly security through its Technology Division.
- Nerds On Site Inc (CSE:NERD, OTCQB:NOSUF) specializes in providing on-site & remote, leading-edge solutions to SMEs & residential clients, serving as the complete IT solution specialist.
- Nubeva Technologies provides next-generation decryption solutions for faster, lower-cost recovery from ransomware attacks.
- Gatekeeper Systems (TSX-V:GSI) is a leading provider of intelligent video and data solutions designed to provide a safer transportation environment for children, passengers, and public safety personnel on multiple transportation modes.
Contact Angela at angela@proactiveinvestors.com
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