UK Cybersecurity Firm Sophos Is Trouncing Silicon Valley

In a world where protecting against cyber-crime is high on most big business agendas, a UK provider of IT security to clients as small as dentists and neighborhood stores is outpacing the best that Silicon Valley has to offer.

Sophos Group Plc shares have more than doubled in 2017, beating every other stock in the Nasdaq CEA Cybersecurity Index, including larger California-based peers such as Symantec Corp. and Palo Alto Networks Inc.

The stock has also left domestic equities trailing, being one of the top five performers in the UK’s FTSE All-Share Index.

Investors’ appetite is understandable. After this year’s global WannaCry ransomware attacks and headline-grabbing hacks at Uber Technologies Inc. and Equifax Inc., demand for cyber security has never been greater, whether you are a multinational corporation or a local shop owner. 

It’s a platform that’s giving Sophos some lofty ambitions in a British technology sector that was jolted by the $32 billion Japanese takeover of ARM Holdings in July 2016. “We should be, we will be, the UK tech champion,” Chief Financial Officer Nick Bray said in an interview. To get there, Bray will need to overtake software giants including Sage Group Plc and his former employer Micro Focus International Plc, whose market value of about 10.8 billion pounds ($14.5 billion) dwarfs Sophos’s 2.5 billion pounds. 

The executive’s optimism is mostly shared by analysts, with nine out of 10 having buy recommendations on the stock and none advising clients to sell. Morgan Stanley named Sophos its top European technology sector pick for 2018 in a recent note. 

Yet, after this year’s gains, not all are bullish: KeyBanc’s Rob Owens cut Sophos to sector weight last month when it was trading about 12 percent above its current price of 541 pence. 

Demand for Sophos’s services is growing as cyber-crime tactics evolve. According to Bray, criminal gangs are changing tack and aiming hacks at a large number of smaller companies instead of a handful of bigger corporations, making cybersecurity “very relevant’’ for smaller firms.

Sophos’s products are aimed at mid-market businesses with up to 5,000 employees, but also include very small companies that are “playing catch up” with the need to protect against cyberattacks, he said. A dental practice could lose access to its patient records, for example.

After riding a wave in technology stocks for much of the year, Sophos shares have slipped back with the sector in recent weeks, also weighed down by a share placing by early investor Apax Partners. That and some recent share sales by directors led to oversupply, a weak share price and “misplaced concern about the fundamentals, which are very strong,” said Numis analyst David Toms, who upgraded the stock to add from hold recently.

Organic growth remains Sophos’s primary focus, according to Bray. The company is always evaluating “targeted technology tuck-ins” to boost its offering via mergers and acquisitions. Any deals it does pursue, like the 2015 purchase of Dutch endpoint protection firm SurfRight and this year’s acquisition of the software product arm of Invincea, would be done to expand the product offering and boost cross-selling scope, burnishing its organic growth potential.

Yet the pace of the company’s growth raises the question of whether Sophos may itself become a target. While no board members want to sell, “it’s not impossible,” Bray said. “You can never stop somebody knocking at the door.”

Information-Management

You Might Also Read: 

Startups Are Changing The Future Of Cybersecurity:

Darktrace Cybersecurity Raises New Funding:

Cyber Security Firm Tanium Raises New Capital At $2.5billion Valuation:

 

 

« Major Chip Flaws Confirmed
Offensive Security, Cyber Insurance & Cryptocurrencies: 2018 Predictions »

Infosecurity Europe
CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

ManageEngine

ManageEngine

As the IT management division of Zoho Corporation, ManageEngine prioritizes flexible solutions that work for all businesses, regardless of size or budget.

North Infosec Testing (North IT)

North Infosec Testing (North IT)

North IT (North Infosec Testing) are an award-winning provider of web, software, and application penetration testing.

Infosecurity Europe, 3-5 June 2025, ExCel London

Infosecurity Europe, 3-5 June 2025, ExCel London

This year, Infosecurity Europe marks 30 years of bringing the global cybersecurity community together to further our joint mission of Building a Safer Cyber World.

LockLizard

LockLizard

Locklizard provides PDF DRM software that protects PDF documents from unauthorized access and misuse. Share and sell documents securely - prevent document leakage, sharing and piracy.

CSI Consulting Services

CSI Consulting Services

Get Advice From The Experts: * Training * Penetration Testing * Data Governance * GDPR Compliance. Connecting you to the best in the business.

Corero Network Security

Corero Network Security

Corero Network Security is dedicated to improving the security of the Internet through the deployment of its innovative DDoS & Network Security Solutions.

Ikerlan

Ikerlan

Ikerlan is an R&D technology centre specialising in areas including embedded systems, industrial automation and industrial cybersecurity.

WetStone Technologies

WetStone Technologies

WetStone develops software solutions that support investigators and analysts engaged in eCrime Investigation, eForensics and incident response activities.

Tessian

Tessian

Tessian (formerly CheckRecipient) is a next-generation email security platform that helps enterprises counteract human error and significantly reduce the risk of data loss.

Business Continuity

Business Continuity

Business Continuity delivers integrated IT solutions for cybersecurity, virtualization, cloud platforms and operational security solutions.

Calero Software

Calero Software

Calero is a leading global provider of Communications and Cloud Lifecycle Management (CLM) solutions designed to simplify the management of voice, mobile and other unified communications services.

SOOHO

SOOHO

SOOHO helps to detect security vulnerabilities earlier. Our blockchain security platform audits from smart contracts to on-chain transactions.

Cyemptive Technologies

Cyemptive Technologies

Cyemptive's CyberSlice technology preempts and remove threats before they take hold, in seconds, compared to other’s hours, days, weeks and even months.

Bolt Learning

Bolt Learning

Bolt's Cyber Security eLearning module provides users with an in-depth understanding of cybercrime, how it can occur and what everyone can contribute to preventing it.

Motiv ICT Security

Motiv ICT Security

Motiv is the ICT security specialist that provides public and private sector organisations with IT security solutions and services to prevent cybercrime, data theft and data breaches.

NordLayer

NordLayer

NordLayer is an adaptive network access security solution for modern businesses — from the world’s most trusted cybersecurity brand, Nord Security. 

ClearHub

ClearHub

The aim of ClearHub is simple: to give businesses like yours access to the best talent, all screened and technically tested by Clearvision’s expert team.

PhishFirewall

PhishFirewall

PhishFirewall is an advanced AI-driven CyberSecurity Awareness Education, Threat Emulation, and Human Security Analytics Platform.

MyTurn Career LLC

MyTurn Career LLC

Looking for a rewarding career in cybersecurity? Explore a wide range of cybersecurity jobs and opportunities in this rapidly evolving field.

InfoSecTrain

InfoSecTrain

InfoSecTrain are a leading training and consulting organization dedicated to providing top-tier IT security training and information security services to organizations and individuals across the globe

Corix Partners

Corix Partners

Corix Partners is a Boutique Management Consultancy Firm focused on assisting CIOs and other C-level executives in resolving Cyber Security Strategy, Organisation and Governance challenges.