Sourcefire Set For Cybersecurity Boost
COLUMBIA, Md. (
) --
Sourcefire
(FIRE)
, which reports its fourth-quarter results before the market opens on Thursday, is gearing up for a big 2010 boosted by federal security spending.
The security software maker, which was one of
TheStreet's
, has attracted plenty of admiring glances recently and remains close to the U.S. government's security efforts.
"Our checks indicate that the Q3 seasonal strength in U.S. federal cybersecurity spending could continue for several years," wrote Katherine Egbert, an analyst at Jefferies & Company, in a note released on Wednesday. "IT security breaches are making headlines almost daily now, and the wording of the Obama administration's FY11 budget indicates that securing national intelligence and defense infrastructure is a multi-year, coordinated effort."
The U.S. government, which recently appointed its
first cybersecurity tsar
, is expected to increase its spending on IT security from $7.9 billion in 2009 to $11.7 billion in 2014, so there is clearly plenty of upside potential for Sourcefire investors.
"U.S. federal officials recently asked Sourcefire management to have more employees undergo a high-level security clearance process, so they could do more business with Sourcefire deep in intelligence and defense," wrote Egbert. The company is also expected to announce plans for international expansion, she added.
Analysts surveyed by Thomson Reuters expect Sourcefire to report fourth-quarter revenue of $32.99 million and earnings of 19 cents a share, compared to $25.7 million and 13 cents a share in the prior year's quarter.
The company's shares have risen more than 270% in the last twelve months, and Jefferies analyst Egbert has reiterated her buy rating on the company's stock.
The small-cap company is nonetheless
up against some massive competitors,
namely
Cisco
(CSCO) - Get Report
and
McAfee
(MFE)
, which recently
blew past analysts' fourth-quarter revenue estimates
.
Sourcefire has already been an
for
Barracuda Networks
and Check Point, with the latter running into intense political opposition. Sourcefire's 'Snort' intrusion detection technology is so widely used in the U.S. intelligence community, though, that Washington lawmakers cited national security concerns about a possible Sourcefire sale.
-- Reported by James Rogers in New York
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>>Obama: Tech Security a Key Priority
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