Sign up Australia
Proactive Investors - Run By Investors For Investors

Sophos shares edge lower as it confirms drop-off in first-quarter billings growth

Sophos warned investors earlier this month that growth in the first quarter hadn’t been as strong as expected, although its long-term outlook is unchanged
cybersecurity
Even with the recent falls, Sophos shares are still worth more now than they were this time last year

Sophos Group PLC (LON:SOPH) saw its shares edge lower on Thursday after confirming lower-than-expected billings growth in its fiscal first quarter.

The cybersecurity specialist warned investors earlier this month that growth in the opening few months hadn’t been as strong as hoped, albeit against strong comparatives. The news sent the share price plunging by a fifth.

READ: Sophos' warning catches market on the hop

As it had guided for in that update, group billings rose 2% on a constant currency basis to US$174.9mln (Q1 17: US$164.3mln), compared with growth of 16% in the preceding quarter.

Speaking earlier this month, Hargreaves Lansdown equity analyst Nicholas Hyett said: “Sophos is meant to be a high growth stock – so a 2% underlying increase in billings was never going to cut the ice with investors."

The group said the drab growth was primarily down to its Enduser security business, which in the corresponding period a year earlier, had enjoyed a sparkling performance, thanks to high-profile ransomware attacks such as the WannaCry virus.

“As we look forward, we expect a return to mid-teens constant currency billings growth in the second-half of the year,” said chief executive Kris Hagerman.

“In H2, prior-year comparisons become more favourable, the temporary effects of legacy product transitions diminish, and the renewal rate is expected to return to a more normal range.

“This, combined with the expected strong growth in our future renewal book into FY20, continues to give us confidence in our long-term outlook.”

Shares were down 2.9% to 508p.

View full SOPH profile View Profile

Sophos Group Timeline

Newswire
November 11 2015

Related Articles

Mergers & acquisitions - takeover
January 11 2018
"Vermeg's acquisition of Lombard Risk will create a leading global financial software provider," said Badreddine Ouali, founder and chairman of Vermeg
Office workers
July 28 2018
The company supplies software, solutions and services to a Canadian and global client base.
facial recognition app user
March 02 2018
Fintech company to roll out ID authentication tools amid debut on OTCQB

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use