Intrusion Stock: Market-Thumping Cybercrime Stock Could Double Again

INTZ Stock Builds on Gains Made Since Q1 Earnings Report

Cyberattacks are on the rise, they’re getting more sophisticated, and their targets are more sensitive than before. Cybercrime threatens businesses, governments, and individuals.

According to one study, cyberattacks occur every 39 seconds. According to another study, 61% of successful cyberattacks are “zero-day” attacks and 34% of them are “malware-free” attacks. (Source: “Investor Presentation: March 2022,” Intrusion Inc., last accessed July 6, 2022.)

Zero-day cybercrimes involve newly discovered security vulnerabilities that hackers use to attack a system before the developer has a chance to fix it. The term “zero-day refers” to the fact that the victim has just learned about the cyberattack and has zero days to fix it.

Malware-free cybercrimes are those that don’t result in a file or file fragment being written to a disk. This includes cyberattacks in which memory-executed codes target a network or gain access through a back door.

Advertisement

Unfortunately, traditional cybersecurity products are ineffective against zero-day and malware-free attacks. This might explain the recent spike in cyberattacks, despite the increased spending on security infrastructure.

Global spending on cybersecurity is projected to climb from $133.8 billion in 2021 to $213.7 billion in 2025. Over the same time frame, the economic impact of cybercrime is forecast to expand by 75% from $6.0 to $10.5 trillion.

That’s where Intrusion Inc. (NASDAQ:INTZ) comes in. With a market cap of just $73.0 million, chances are you’ve never heard of the company.

A provider of threat detection in the U.S., Intrusion Inc. uses the largest cyberthreat database in the world, along with propriety artificial intelligence (AI) algorithms.

While Intrusion stock’s price trended in a tight range throughout the second half of 2021 and the start of 2022, it has been trending steadily higher over the last two months. As of this writing, INTZ stock is:

  • Up by 22% over the last month
  • Up by 56% over the last three months
  • Up by 11% over the last six months
  • Up by 15% year to date
  • Down by 75% year over year

Intrusion stock started to trend higher after Intrusion Inc. reported better-than-expected first-quarter results in mid-May and announced that it’s on track to launch new products in the second half of 2022.

Moreover, the company improved its financial flexibility by closing unsecured-note financing in the aggregate amount of nearly $5.4 million.

Chart courtesy of StockCharts.com

About Intrusion Inc.

Intrusion Inc. is a cybersecurity company that provides its customers with access to its exclusive threat intelligence database. The company’s database contains the data, known associations, and reputational behavior of more than 8.5 billion IP addresses. Of those addresses, 3.4 billion are known to be “malicious” and 5.1 billion are known to be “good.”

After gathering global Internet intelligence and originally working exclusively with government entities, Intrusion Inc. released its first commercial product, “INTRUSION Shield,” in 2021.

INTRUSION Shield observes network traffic flow and instantly blocks known malicious connections and unknown connections from entering or exiting a network. This helps protect the network against zero-day and malware-free attacks.

Intrusion Inc. provides its technology via a software as a service (SaaS) model. This helps drive recurring revenue growth, margins, and free cash flow.

The company serves U.S. federal, state, and local government entities; mid-market companies; and large enterprises through a direct sales force and value-added resellers.

To help increase the exposure of its products and propel its sales with non-governmental agencies, Intrusion Inc. has reached out to independent labs and product reviewers to spread the word.

The company currently has more than 200 qualified opportunities and new channel partner leads to work on.

Strong Q1 Results

For the first quarter of 2022, which ended March 31, Intrusion Inc. announced that its revenue was flat year-over-year and up by 12.5% sequentially at $1.8 million. The company’s INTRUSION Shield revenue was up by seven percent sequentially and accounted for 12% of its total revenue. (Source: “Intrusion, Inc. Reports First Quarter of Fiscal 2022 Results,” Intrusion Inc., May 12, 2022.)

The company’s gross profit margin was 64% in the first quarter of 2022, compared to 66% in the first quarter of 2021.

Intrusion Inc.’s operating expenses in the first quarter of 2022 were $5.2 million, which was in line with its operating expenses in the first quarter of 2021.

The company reported a first-quarter net loss of $4.1 million, or $0.21 per share. For the first quarter of 2021, it reported a net loss of $3.9 million, or $0.22 per share.

As of March 31, Intrusion Inc.’s cash and cash equivalents were $6.1 million and its working capital was $1.3 million.

The company’s CEO, Tony Scott, said, “The early re-alignment actions we took last year are now beginning to show results with improved partner and channel enablement, increased pipeline, increased [proofs of concept], and sales growth beginning in the first quarter and improving in the second quarter.” (Source: Ibid.)

He added,

Our new products, INTRUSION Shield Cloud and INTRUSION Shield Endpoint are on track for demo in the second quarter and general availability in the second half of 2022. Importantly, we have strengthened our overall financial position so that we are able to meet our operational needs and support our strategic initiatives.

(Source: Ibid.)

Analyst Take

Intrusion Inc. has been around since 1983, but it only began to sell its commercially available cybersecurity products in 2021.

As a result, the company is, as far as the average consumer goes, the new kid on the block. But with the growing threat of cyberattacks, the demand for the company’s technology has been growing.

As such, INTZ stock has been rising in value and could still double.