McAfee Poised to Surpass Symantec: Analyst

SANTA CLARA, Calif. (TheStreet) -- McAfee(MFE Quote) is snapping at the heels of Symantec(SYMC Quote) in the race to be the world's largest security software company, according to analyst firm Jefferies & Company, which says that the company could offer upside to investors.

The Santa Clara, Calif.-based firm, which was one of TheStreet's top tech picks for 2009, is enjoying a good year. McAfee recently posted strong second-quarter results, boosted by sales to both consumers and corporations.

"McAfee is set to surpass Symantec as the largest enterprise security provider, perhaps as soon as this quarter," wrote Jefferies analyst Katherine Egbert, in a note released Tuesday. "With a macro recovery possibly on the way, McAfee seems well-positioned for the second half of the year."

The analyst, who reiterated her McAfee "Buy" rating and $49 price target, explained that the firm is also in the last month of an 18-month deal to sell its software on Dell(DELL Quote) PCs.

"The October renewal seems to be a two horse race between McAfee and Symantec," she wrote. "[But] we expect McAfee to retain the contract, given the longstanding relationship, potential for an appliance partnership down the road, and McAfee's rich history of Dell conversion rates."

Jefferies & Company estimates that Dell accounts for approximately 6% of McAfee's total revenue and says that the security company may be pushing for a similar deal with Hewlett-Packard(HPQ Quote), where Symantec is the incumbent.

During its recent second-quarter conference call, McAfee said that it is winning share from its rivals. McAfee won 28 deals worth more than $1 million in the quarter, according to CEO Dave DeWalt, up from 21 in the year ago-quarter and 18 in the first quarter of 2009. Some 83 companies within the Fortune 100 currently use McAfee software, he added.

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