Proofpoint (PFPT) is up 1% after the company once again reported EPS, revenue and billings above guidance. The company has done that consistently since the IPO five years ago.
Guidance for the fourth quarter was towards the high end of expectations as the company did raise its outlook for fiscal 2017. Guidance for 2018 EPS was in-line with estimates while revenue guidance a little soft.
Proofpoint is calling for billings growth to slow to 27% next year from 36% this year. While some of the shorter term focused traders were not impressed by the lack of upside to the fiscal 2018 guidance, it appears to set the company up to continue the 'beat and raise' story that investors have grown accustomed to. Analysts generally remained positive on the stock this morning.
Proofpoint is the leader in email security for large enterprises. Email security is the most vulnerable part of an enterprise given that it is susceptible to human error/misjudgment.
The stock trades at a premium multiple (7x next year's sales with a $4.3 billion market capitalization), which seems deserved after five years of consistently strong execution.
Last month at the Analyst Day, the company raised its 2020 financial target. The company is calling for 2020 revenue of $1.025-1.10 billion, free cash flow of $266 mln and non-GAAP gross margins of 77-79% and operating margins of 13-15%.