Proofpoint recently priced their IPO above the $10-12 range at $13 and has held together well in the aftermarket where it’s trading at $13.77. We’re actively covering much of the information security space because it is so critical to consumer internet use, mobile computing and enterprise data and information management. We’ve just published a brief note on Proofpoint along with an IV and updated InfoSec ecosystem.

The full note (pdf) is available on the website but here is the summary:

Proofpoint provides an information security suite centered around secure email with additional functions for email management, compliance and governance. They deliver their solution in the cloud using a SaaS implementation and busi-ness model. The market is well established and filled with many competitors including Cisco, Symantec, Microsoft, Google and Intel/McAfee. Proofpoint has a strong offering in terms of the quality of their spam and malware pro-tection, their management interface and SaaS-based deployment. Because the company is small relative to their customers and market opportunity they will have to “punch above their weight” consistently to win. The shares at current prices already reflect years of success and are slightly above our own intrinsic valuation of $12.50 for 2013. We like the product, strategy and management but current valuation doesn’t leave much room for reward.

So far information security IPO names have done well and we expect Palo Alto Networks and AVAST to be com-ing soon as well. Palo Alto appears to be very well positioned in the enterprise space and more able to take on some of the existing giants there. Their IPO is also likely to be priced high so we will have to wait and see if it is an investment opportunity.

Use the link below to access the note if you are registered and logged in:

Proofpoint (PFPT) IPO Note May 10, 2012 ($) – Proofpoint provides enterprise information security solutions for email using a cloud-based SaaS approach. Our LTIV is $12.50.

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