Over the past year, we've heard a lot about selling platforms in cyber. Could 2H 2024 see the return of BIG cyber #acquisitions? We've seen a very active private M&A market with recent acquisitions of Avalor Security, a Zscaler Company, Airgap Networks Inc., a Zscaler Company, Flow Security and Gem Security. However, data from Morgan Stanley Research (Hamza Fodderwala, Keith Weiss, Angie Song) shows that nearly half of the key public #cybersecurity stocks are trading below the historical average M&A multiples. And after 2 years of decline, bookings growth has finally shown signs of stability, operating margins have continued to improve and public companies are trading at valuations cheaper than what we have typically seen strategic acquirers pay for assets. Acquisitions typically create product roadmap disruptions as two companies debate how to prioritize goals, and this gives #founders a unique opportunity to build new startups. If you're working on something new, please reach out!
Gajraj S.
7mo
As a investor I’m inclined to buy OKTA FTNT and sell NET CYBR QLYS as a strategic trade. CRWD PANW ZS are secular growth companies to never sell!
Paul Passey
7mo
If the equation includes data and AI/ML, then yes.
Travis Benoit
8mo
exciting times ahead in the cyber sector. 🚀 stay sharp and seize those opportunities.
Cybersecurity CMO
8moSid Trivedi Great insight! Couple of thoughts: 1. Many companies trading below the line are not high-growth ventures anymore. So, they are not unfairly valued. 2. M&A typically ( except firesale acquisitions that don't get reported ) involves startups that promise high growth accretion. So, the acquirer has to pay a higher multiple for future growth. Lastly, our industry is a very small part of IT and Software with lot of overlap in value prop and problems we solve. So, customers and by extension investors end up choosing the winners leaving the lower half for bottom fishers! Hope this makes sense!