NEW YORK (The Deal) -- As corporations have spent hundreds of billions of dollars to move their information technology systems and applications to cloud architecture in recent years, they have found themselves with an immensely valuable portfolio of assets to protect from a new wave of cyber criminals, state operatives and hacktivists.
Philippe Courtot, chairman and CEO of cloud security outfit Qualys (QLYS) said in a recent interview that major advances in technology have typically spawned such challenges. "When the railroad came in," Courtot observed, "suddenly what we realized is that there were a lot of pickpockets in the train stations."
Qualys provides cloud security on a service billing model. It is among a group of companies that have seen spikes in their share price as high-profile hacking and M&A premiums have highlighted the value of security technology.
"Security comes always after," Courtot said. "The reason that security always comes after is because you cannot anticipate all of these security holes you will have as you are building this new infrastructure."(IMPV) has gained 28%. ProofPoint (PFPT) shares have gained 26% and Palo Alto Networks (PANW) is up close to 29%. FireEye (FEYE) which is closing the nearly $1 billion purchase of Mandiant, has gained 66% in 2014. While the stocks have soared, there have been patches of turbulence. Qualys had a nearly 20% intraday drop following its earnings report earlier this month, but closed up on the day. Similarly, FireEye fell 11 % when it reported a larger than expected first-quarter loss. Pacific Crest Securities analyst Rob Owens wrote that Qualys has had "a fantastic run through 2013 and 2014," in a report following the company's fourth-quarter earnings report in February. Qualys remains "a quality story with reacceleration on the horizon," Owens stated, "but much of that is reflected in the current valuation, in our view." Baird Equity Research analyst Steven Ashley wrote that much of the company's focus is on the next generation of products, which will drive future growth but will not likely boost 2014 results. Qualys said it plans to release two products at the RSA security conference in San Francisco in late February.
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