MIME Stock: Winning in the E-Mail Security Space
Mimecast Stock Should Keep Soaring on Rising E-Mail Threats
Investing in the stocks of companies that protect valuable business data against cyber threats remains one of the popular ways of reaping gains in the long term. Investors stand to gain superlative returns by investing in stocks that are good plays on the prevailing uncertainty and fear about potential cyberattacks.
Take Mimecast Ltd (NASDAQ:MIME), a leading provider of global cloud security and risk management services. Given today’s rapidly changing threat landscape, where e-mail has become a data leak concern and a powerful attacking point, the company’s proprietary cloud services protect its customers from risks coming from e-mails.
Mimecast uses a software-as-a-service (SaaS) model, provided via an annual subscription.
The company’s archiving services enable its customers to use an increasing archive of information to improve employee productivity. Overall, Mimecast’s performance has been impressive, as has been the rising trajectory of MIME stock.
As of December 31, 2017, Mimecast provided its services to about 29,200 customers and millions of their employees.
As is well known, e-mail is a critical tool for organizations of all sizes. Protecting and managing e-mail has become quite complex, due to the rapid increase in both the volume and the importance of the information transmitted. The security and compliance requirements are increasing in step.
Given the popularity of the company’s products and services, the future of Mimecast stock appears to be quite bright.
According to a report by the The Radicati Group, referred to in Mimecast’s latest annual filing, the average e-mail storage per business user will grow by 65% between 2016 and 2020. The value of this archive of sensitive corporate data grows with every e-mail and file exchanged. The report predicts that the number of business e-mails sent each day worldwide is likely to grow from 112.5 billion in 2015 to 128.8 billion in 2019. (Source: “Form 20F“, Mimecast Ltd, May 26, 2017.)
Mimecast is well positioned to capitalize on the in the corporate communications field. Organizations are not just using e-mail for communications; they are increasing their usage of e-mail archives to store vital information.
This has resulted in e-mail acquiring one of the highest concentrations of business risk that organizations may face. Given the worsening cyber threat landscape, the demand for Mimecast’s solutions should continue to go up, which bodes well for MIME stock.
The company has significant opportunities in its existing market while continuing to make investments in sales and marketing to continue expanding its customer base in target markets.
Mimecast has been posting positive business performance. It announced its third-quarter results last month. Total revenue was $67.3 million, an increase of 39% year-over-year. The company also added 1,100 new customers.
Bauer further said that the company delivered results that exceeded revenue guidance. (Source ” Mimecast Announces Third Quarter 2018 Financial Results,” February 12, 2018.)
The cloud-based e-mail management and security stock made its debut at around $10.00, and it has gained over 200% since its initial public offering (IPO) in 2015.
The stock price has gone up by more than 50% over the last year. The following chart shows this phenomenal rise.
Chart courtesy of StockCharts.com
Mimecast’s growth and success depend on the company’s ability to expand its customer base, as well as sell additional services to its existing customers. So far, it has succeeded in its efforts and, if it continues to do so, Mimecast stock has the potential to achieve triple-digit returns.
Analyst Take
Despite the introduction of new products and services, e-mail continues to be the primary way that organizations exchange information and communicate externally and internally. Mimecast was formed with the mission of making e-mail safer and better, as well as transforming the way organizations protect, store, and access their e-mail and corporate information.
Mimecast has become a leading e-mail and data security company whose products help protect e-mail data and employees from spam, malware, and other attacks. As the amount of critical and sensitive data in e-mail archives increases, the e-mail security market will continue to grow. This should keep MIME stock flying higher in the coming years.
Investors who want to play the cybersecurity trend should not ignore the opportunity in Mimecast stock.
