Why Cybersecurity Could Come Alive in 2016

By Chris Lange Updated Jan 13, 3:04PM EST · Published Jan 13, 12:50PM EST

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Why Cybersecurity Could Come Alive in 2016 — © Thinkstock

A few cybersecurity stocks made solid gains in Wednesday’s trading session on merger speculation and survey results that imply an increased demand for these firms. Reuters reported that CyberArk Software Ltd. (NASDAQ: CYBR) was in “takeover talks” with Check Point Software Technologies Ltd. (NASDAQ: CHKP), but both companies refused to comment. FireEye Inc. (NASDAQ: FEYE) and Rapid7 Inc. (NASDAQ: RPD) experienced the rising tide from this as well, but Rapid7 is also up on positive survey results.

CyberArk led the group on the day in terms of its gains. Before the stock took off, the market cap was just over $1 billion, and the company expects revenues for the 2016 full year to be $202.3 million. Over the past 52 weeks, CyberArk’s stock is down about 1% (to Tuesday’s close) but the stock is down 16% year to date in 2016. Check Point has a market cap of over $14 billion.

FireEye is closely tied to CyberArk and when one moves the other generally moves as well.

Rapid7 is primarily rallying from the results of its 2015 Incident Detection and Response Survey. The survey includes findings from hundreds of security professionals at organizations of varied sizes across the globe on their biggest security concerns and planned initiatives for 2016.

Three key points from the survey were:

90% of organizations are worried about compromised credentials, though 60% say they cannot catch these types of attacks today.
62% of organizations are receiving more alerts than they can feasibly investigate.
45% of respondents plan to increase spending on incident response programs and solutions.

Based on these results, 2016 could be a big year for cybersecurity, assuming more organizations will take on these third-party cybersecurity firms.
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CyberArk shares were last seen trading up about 24% at $46.84, with a consensus analyst price target of $55.15 and a 52-week trading range of $33.00 to $76.35.

Shares of Check Point were trading up 0.8% to $79.37, within a 52-week trading range of $65.09 to $88.49. The consensus price target is $92.26.

Rapid7 shares were up 3.7% to $15.18. The consensus price target is $27.40, and the 52-week range is $13.24 to $27.45.

And FireEye was up 5% to $17.72, with a consensus price target of $32.57 and a 52-week range of $16.39 to $55.33.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.