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- BlackBerry formal response:
https://threatvector.cylance.com/en_...al-bypass.html
"BlackBerry Cylance is aware that a bypass has been publicly disclosed by security researchers. We have verified there is an issue with CylancePROTECT which can be leveraged to bypass the anti-malware component of the product.
Our research and development teams have identified a solution and will release a hotfix automatically to all customers running current versions in the next few days.
More information will be provided as soon as it is available."07-19-19 11:26 AMLike 2 - So...
What do our fair and balanced friends from BoA have to say about CRWD?
BoA/ML - Equity | 19 July 2019
Tal Liani/Research Analyst
CrowdStrike Holdings Inc.
Solid results and guidance out of the gate; best-in-class growth rates; reiterate Buy
Reiterate Rating: BUY | PO: 89.00 USD | Price: 72.75 USD
2Q guidance well above expectations; raise PO to $89
CrowdStrike reported solid results out of the gate. 1Q revenue/EPS of $96mn/-47c was in-line with the preliminary estimates in the company’s prospectus, representing an impressive 116% YoY subscription growth rate. The 2Q revenue/EPS outlook was well above Street estimates at $104mn/-23c vs $97mn/-31c, and the company also issued better FY20 revenue guidance at $433mn vs consensus’ $412mn. The updated guidance implies 2H YoY revenue growth of about 60%, and we continue to see potential upside as the company executes well with upselling additional subscription services. We raise our estimates to reflect the stronger outlook and raise our PO from $75 to $89, now based on 30x our CY20E EV/Sales (vs prior 27x) to capture higher growth rates.
Executing well with key metrics all in right direction
The land and expand model is on full display in 1Q with key metrics all moving in the right direction. First, CrowdStrike is rapidly adding new customers, with 543 net new customers in 1Q vs an average of 319 added per quarter in FY19. The upsell opportunity also remains attractive, with roughly +47% customers adopting 4+ cloud modules out of 10 available modules – a metric that consistently improves. The company highlighted that the majority of new customers are purchasing bundles of three or more modules and sales to existing customers also indicate upsell opportunities, with a net retention rate at roughly 141%. Management highlighted several key wins in the quarter, including a federal customer that is now purchasing seven modules and addressing over 400k endpoints.
Valuation remains top risk, but justified by attractive TAM
We continue to flag valuation as a risk, with the stock trading at about 28x CY20E EV/Sales after-hours. However, we see potential for CrowdStrike to continue outperforming expectations which should drive upside for the stock, in our view. We also believe CrowdStrike is positioned well to dominate the $7bn endpoint security market by replacing incumbents and beating fellow next-gen vendors. Over time, the broad platform and introduction of the app store should help CrowdStrike expand its TAM to roughly $25bn+, with further upside being a function of new products for new markets like virtualized environments, containers, mobile devices, IoT, and IT operations.07-19-19 12:04 PMLike 4 -
Also.....To the extent that the underwriters sell more than 18,000,000 shares of our Class A common stock, the underwriters have an option to purchase up to an additional 2,700,000 shares from us at the initial public offering price07-19-19 01:08 PMLike 5 - Wait until the lock up period ends to see how the share price responds..."the lock-up period shall end 120 days after the date of this prospectus".
Also...."Upon the completion of this offering, based on the number of shares of our capital stock outstanding as of January 31, 2019, we will have a total of 18,000,000 shares of our Class A common stock outstanding and 178,688,971 shares of our Class B common stock outstanding."
https://www.sec.gov/Archives/edgar/d...or_future_sale07-19-19 01:42 PMLike 4 - Pegasus spyware targeting the cloud.
https://www.ft.com/content/95b91412-...e-3cdf3174eb89
Interestingly enough, some words of wisdom from JC.
https://edmontonjournal.com/technolo...8-723d5e41a78207-19-19 02:36 PMLike 3 - Pegasus spyware targeting the cloud.
https://www.ft.com/content/95b91412-...e-3cdf3174eb89
Interestingly enough, some words of wisdom from JC.
https://edmontonjournal.com/technolo...8-723d5e41a782
Talk is cheap07-19-19 09:37 PMLike 3 - Surprised at the reaction from CRWD's numbers. Well maybe not given the realm we find ourselves in. Modest beats not unlike BB's but a wholly different reaction.
The big thing that struck me however, is that, based on revenue of 96.1m for this quarter and 103% growth, that implies a dollar value growth of ballpark $49m Yoy.
They projected $103m for next Q, and full year guidance high end of $436m. So assume similar QoQ growth, and say Q3 113m, Q4 124m.
Will QoQ growth from Q4 to Q1 next year suddenly jump to like 60% to maintain the 100%+ growth? Or will it be more in line with their own (implied) QoQ guidance of around 7%?
I feel it's more more likely to be the latter. And if that's the case it would put next years Q1 around $135m or so. So now the Cinderella story not only shows growth around 35% or so (almost neck and neck with Cyance), but it would apparently either be decelerating or stagnating on a dollar basis. Given that it's so early in the game, and there's a huge section of the addressable market unaddressed, shouldn't be the opposite?
This is a perfect real world example of the multi-iterative forecast of "and then.... and then...? and then....?" that I had talked about with BB in previous posts.
Two companies, same sphere, both apparently with real time annualized growth rates around 30-35%, one with double the revenues, but that one valued at like 20x the other. For the record I'm not saying CRWD is a bad company. The opposite in fact, but I just have a hard time reconciling their respective valuations given the metrics.07-20-19 07:07 AMLike 7 - Surprised at the reaction from CRWD's numbers. Well maybe not given the realm we find ourselves in. Modest beats not unlike BB's but a wholly different reaction.
The big thing that struck me however, is that, based on revenue of 96.1m for this quarter and 103% growth, that implies a dollar value growth of ballpark $49m Yoy.
They projected $103m for next Q, and full year guidance high end of $436m. So assume similar QoQ growth, and say Q3 113m, Q4 124m.
Will QoQ growth from Q4 to Q1 next year suddenly jump to like 60% to maintain the 100%+ growth? Or will it be more in line with their own (implied) QoQ guidance of around 7%?
I feel it's more more likely to be the latter. And if that's the case it would put next years Q1 around $135m or so. So now the Cinderella story not only shows growth around 35% or so (almost neck and neck with Cyance), but it would apparently either be decelerating or stagnating on a dollar basis. Given that it's so early in the game, and there's a huge section of the addressable market unaddressed, shouldn't be the opposite?
This is a perfect real world example of the multi-iterative forecast of "and then.... and then...? and then....?" that I had talked about with BB in previous posts.
Two companies, same sphere, both apparently with real time annualized growth rates around 30-35%, one with double the revenues, but that one valued at like 20x the other. For the record I'm not saying CRWD is a bad company. The opposite in fact, but I just have a hard time reconciling their respective valuations given the metrics.
The other missed expectations
The market reacted accordingly. Nothing more; nothing less07-20-19 08:03 AMLike 3 - I had purchased shares of Netflix back in June of 2013. After a few weeks I sold them because I wasn't sure if their growth story would be sustainable (some analysts said that it wasn't). Instead I bought more shares of BlackBerry :-)
Since then, Netflix grew their revenues from 1 billion USD (June 2013) to 5 billion USD (today), on a quarterly basis. They didn't create a new market, but they were smart enough to pick up the majority share of a market that was evolving.
I think the endpoint security market is similar. There's a huge opportunity for AI and cloud solutions, for more than one company, perhaps.
I don't think that the Crowdstrike valuations are that insane. They might hit 1 billion USD in yearly revenues in 2 years or less. So what should BlackBerry management do in order to get a better valuation out of Cylance? Why are they emphasizing on integrating Cylance into BlackBerry products, when they should really focus on retaining Cylance talent and just sell the h*ll out of the existing Cylance product line?
I think it's because they're trying to cover up the dismal performance of their ESS division, and that just isn't right. They should leave Cylance as a standalone entity, and let them compete in an industry that will rapidly decide who are the winners, and who isn't....
If Cylance in a few quarters or years turns out to be rather 'meh', then they will have lost a golden opportunity. You don't integrate technology before it has had the time to proof itself to a really large audience.
Focus on what brings a higher valuation, because better opportunities and products usually follow. Compare Netflix today to what it was in 2013..07-20-19 12:29 PMLike 3 - OT for those interested in Security and Privacy:
Email sextortion scams are on the rise and they’re scary — here’s what to do if you get one
https://www.cnbc.com/2019/06/17/emai...m=malwarebytes
Last year, these complaints rose 242% to 51,146 reported crimes, with total losses of $83 million.
The advice from experts: Don’t fall for it. It’s all fake. The only reason it works so well, Sopori said, is because “People, especially young people, have come to believe there’s no such thing as privacy anymore.” This belief leads people to assume that anyone can spy on them at any time, or can even misuse their information to create the appearance of impropriety where it doesn’t exist.
Sextortion Bitcoin scam makes unwelcome return
https://blog.malwarebytes.com/cyberc...elcome-return/
Heads up: a particularly nasty sextortion Bitcoin scam from at least the middle of 2018 is making the rounds once again.07-20-19 02:08 PMLike 0 - In my case I'm at the point where previously I've bought back in at the "low" only to see it hit new lows over and over again. All this in an era where supposedly the post-handset "new strategy" should be finally producing results. Instead we have continued poor performance with the attendant deflating share price. I can't believe Chen isn't in private having all out panic attacks or at least questioning his own thinking. There really needs to be a rebalancing of priorities to focus less on building the future and to begin to show some profits from the current revenue streams.
I have made a recent personal decision to cease adding more funds to purchase even more BBRY shares by way of capping my personal investment risk in this stock. So now, I'm stuck watching my portfolio value drop to unspeakable levels.
Frustration has simply become the norm.
At least, for the past few years though, doubling-down for me has always proven lucrative; although, it is not normally recommended to double-down by the status quo of the investment world.
If you are lower than Prem's average, that should help keep you calm until we see the next upward movement.
Also, many of the investors that short trade this stock are out for the summer, so by or before Fall, my bet is that this thing will move.07-20-19 03:51 PMLike 0 - Surprised at the reaction from CRWD's numbers. Well maybe not given the realm we find ourselves in. Modest beats not unlike BB's but a wholly different reaction.
The big thing that struck me however, is that, based on revenue of 96.1m for this quarter and 103% growth, that implies a dollar value growth of ballpark $49m Yoy.
They projected $103m for next Q, and full year guidance high end of $436m. So assume similar QoQ growth, and say Q3 113m, Q4 124m.
Will QoQ growth from Q4 to Q1 next year suddenly jump to like 60% to maintain the 100%+ growth? Or will it be more in line with their own (implied) QoQ guidance of around 7%?
I feel it's more more likely to be the latter. And if that's the case it would put next years Q1 around $135m or so. So now the Cinderella story not only shows growth around 35% or so (almost neck and neck with Cyance), but it would apparently either be decelerating or stagnating on a dollar basis. Given that it's so early in the game, and there's a huge section of the addressable market unaddressed, shouldn't be the opposite?
This is a perfect real world example of the multi-iterative forecast of "and then.... and then...? and then....?" that I had talked about with BB in previous posts.
Two companies, same sphere, both apparently with real time annualized growth rates around 30-35%, one with double the revenues, but that one valued at like 20x the other. For the record I'm not saying CRWD is a bad company. The opposite in fact, but I just have a hard time reconciling their respective valuations given the metrics.
Crowdstrike is undoubtedly a very good company and has executed flawlessly. But they're not THAT much better, and I think your breakdown nails it.
However, one area where they'll have an advantage is an ability to use their overpriced stock for acquisitions. They could very quickly broaden their product portfolio with little dilution and maintain their turbocharged growth for a while longer that way. Wouldn't it be something if they end up buying BB...?07-20-19 06:45 PMLike 3 - I had purchased shares of Netflix back in June of 2013. After a few weeks I sold them because I wasn't sure if their growth story would be sustainable (some analysts said that it wasn't). Instead I bought more shares of BlackBerry :-)
Since then, Netflix grew their revenues from 1 billion USD (June 2013) to 5 billion USD (today), on a quarterly basis. They didn't create a new market, but they were smart enough to pick up the majority share of a market that was evolving.
I think the endpoint security market is similar. There's a huge opportunity for AI and cloud solutions, for more than one company, perhaps.
I don't think that the Crowdstrike valuations are that insane. They might hit 1 billion USD in yearly revenues in 2 years or less. So what should BlackBerry management do in order to get a better valuation out of Cylance? Why are they emphasizing on integrating Cylance into BlackBerry products, when they should really focus on retaining Cylance talent and just sell the h*ll out of the existing Cylance product line?
I think it's because they're trying to cover up the dismal performance of their ESS division, and that just isn't right. They should leave Cylance as a standalone entity, and let them compete in an industry that will rapidly decide who are the winners, and who isn't....
If Cylance in a few quarters or years turns out to be rather 'meh', then they will have lost a golden opportunity. You don't integrate technology before it has had the time to proof itself to a really large audience.
Focus on what brings a higher valuation, because better opportunities and products usually follow. Compare Netflix today to what it was in 2013..
Posted via CB10b121 likes this.07-20-19 06:52 PMLike 1 -
-
When I first read the article on Vice.com about researchers that were able to trick Cylance's AI tool into "thinking malware was goodware", I have to admit I got a little nervous.
Considering how much of BlackBerry's future is pegged, not only to the success of Cylance and AI, but to providing elite level security, I thought this could be a major blow. But after looking into the details surrounding the "researchers" and reading through some great info provided by others here, I realized that what will define BlackBerry security more than this supposed "breach" would be how they respond, both in time and action. I believe that this can be used as a turning point and will be referenced moving forward as an example of how they respond to changing threats in cyber security and what makes them the gold standard.
Reading through their release and I think they nailed it.
A threat or vulnerability is detected? Look how fast we can fix and seamlessly update:
"By leveraging the power of our cloud architecture, we are able to automatically deploy these enhancements, minimally impacting our customers... The BlackBerry Cylance platform is designed to be agile and to easily support updates."
The truth about AI and our commitment to keep ours updated against the newest threats:
"AI and machine learning models are, by nature, living models. They are designed to evolve and do require periodic retraining and field servicing when appropriate. As we raise the bar against threats, those seeking to bypass these models will continue to search for new vulnerabilities."
I also liked the polite shot they took at the researchers through "A Note on Coordinated Disclosure" about responsible disclosure.
----- A few interesting notes on this:
-The "researchers" were actually competitors.
-The article timing. After BB's stock has been pushed back near 52 wk low & on the day another major competitor releases their 1st earnings report as a public co.
-The article, was updated 4 times throughout the day on the 18th. We saw a similar thing with the Marketwatch article.
-They only tested this on Cylance: ..."Cylance’s PROTECT isn’t the only security product that uses artificial intelligence. Other firms like Symantec, Crowdstrike, and Darktrace use it too, but Ashkenazy and Zini didn’t test those systems".Last edited by smithm565; 07-22-19 at 06:19 AM.
07-21-19 08:18 PMLike 7 - I must say I am getting a bit lost with all the auto deals...
Toyota partners with BYD to make all-electric cars for China market
Not sure it is relevant, but BYD is a BlackBerry customer:
Is China Driving the Future of Auto-Mobility?Last edited by Corbu; 07-21-19 at 10:09 PM.
07-21-19 09:41 PMLike 3 - https://www.prnewswire.com/news-rele...300887501.html
BlackBerry Appoints SYNNEX Corporation as new American Distributor to Manage and Drive Partner Ecosystem Growth
Enhanced Agreement Brings Key Cybersecurity Services to the U.S. Market07-22-19 08:04 AMLike 7 - OT for those interested in Security and Privacy:
Equifax to pay at least $575 million as part of FTC settlement
https://www.cnet.com/news/equifax-to...CMG-01-10aaa1b
The credit reporting company may have to pay up to $700 million over a 2017 data breach. Letitia James, New York attorney general quoted: 'This company's ineptitude, negligence, and lax security standards endangered the identities of half the US population"Greened likes this.07-22-19 03:57 PMLike 1 - OT for those interested in Security and Privacy:
Equifax to pay at least $575 million as part of FTC settlement
https://www.cnet.com/news/equifax-to...CMG-01-10aaa1b
The credit reporting company may have to pay up to $700 million over a 2017 data breach. Letitia James, New York attorney general quoted: 'This company's ineptitude, negligence, and lax security standards endangered the identities of half the US population"
A disgrace.
Who cares about security, really?rarsen and La Emperor like this.07-22-19 05:01 PMLike 2 - Really interesting report from Scotiabank this morning. Excerpt.
EQUITY RESEARCH | DAILY EDGE
Tuesday, July 23, 2019, Pre-market
Rating Sector: Outperform
1-Yr. Target: US$9.50
BlackBerry Limited
Deep Dive into Endpoint Security – Potential for Cylance to Drive Growth over the Medium Term
OUR TAKE: Neutral. With key competitor CrowdStrike having executed a successful IPO, we return to the Cylance story and potential opportunities and risks that motivated BlackBerry to acquire the business for ~$1.5 billion. While the market for endpoint security represents a growing multi-billion opportunity, it appears to also be a crowded market with a range of companies vying for leadership position (e.g., legacy security vendors, newly public companies, and well-funded start-ups).
Our analysis of the security market shows enterprises increasing their focus on endpoint security, with businesses seeking to add endpoint detection and response (EDR) capabilities to their existing endpoint protection (EPP) platforms. Cylance offers a leading EPP solution in a market dominated by legacy security vendors (e.g., Symantec, McAfee), which offers a sizable opportunity for disruption; however, the firm appears to have only recently entered the faster-growing EDR market. BlackBerry is set to unveil its unified AI-driven EPP + EDR solution later in F2020, which could help close the gap to peers in the EDR market.
KEY POINTS
Crowded security market should result in winners and losers. In our assessment of the endpoint security market, we determined there was a large universe of competitors in both the EPP and EDR segments; however, most newer entrants focused primarily on the faster-growing EDR market. While there is potential for EPP and EDR markets to converge toward a more unified offering, our checks indicate that customers are still buying best-of-breed solutions as opposed to a single-vendor solution (e.g., Cylance for EPP, Crowdstrike for EDR). Prior growth estimates from Gartner suggested a stronger growth outlook for the EDR market given the existing penetration of EPP in enterprise and SMB accounts.
Extending Cylance to BlackBerry's portfolio. In our view, the potential to deploy Cylance's core AI platform beyond its existing markets (PCs, desktops) in new markets represents the greatest area of upside of the transaction (e.g., automotive security, mobility security, healthcare + industrial IoT). While these will be longer-term initiatives, we believe the potential exists for BlackBerry to carve out a large presence in certain markets given its existing capabilities (e.g., QNX for automotive, large UEM footprint in government + finance).
Risk/Reward Favours the Upside
In our view, the pullback in BlackBerry’s appears to be overdone; the stock is trading at its lowest levels since 2016/17 after the company successfully shifted its business toward a software-based model. While we believe the premium valuation paid for Cylance (~7x EV/revenue) has put pressure on the stock, our analysis of Cylance and its end-market suggests the business has a reasonable runway for growth within its core EPP market given its disruption of legacy endpoint protection vendors.
Increased competition from EDR-first vendors (e.g., CrowdStrike and Carbon Black) has added to the concerns about Cylance’s slowing growth rate. However, there is the potential for BlackBerry to integrate Cylance’s AI and ML capabilities into its suite of solutions (e.g., QNX, UEM) over the next several years, which could help expand their market opportunity in certain verticals (e.g., automotive) and maintain market share within others (e.g., financial services, government).
In our valuation model, we apply a segmented approach to valuing BlackBerry on our F2021 estimates. We apply a 3x EV/revenue to Enterprise Software and Services (lower growth UEM business), 5x EV/revenue to BTS (QNX + automotive), 6x EV/revenue to Cylance (represents a valuation of $1.5 billion), and 2x EV/revenue to Licensing (high margin and a large portion appears to be recurring). On a consolidated basis, our valuation multiple is 4x EV/revenue on our F2021 estimates.07-23-19 08:41 AMLike 6 - that report was mostly positive but even their 1 year outlook is a bit disappointing at $9.50
I had hopes for $15 this year. Guess that won't be happening anymore.07-23-19 09:13 AMLike 0 -
Increased competition from EDR-first vendors (e.g., CrowdStrike and Carbon Black) has added to the concerns about Cylance’s slowing growth rate. However, there is the potential for BlackBerry to integrate Cylance’s AI and ML capabilities into its suite of solutions (e.g., QNX, UEM) over the next several years, which could help expand their market opportunity in certain verticals (e.g., automotive) and maintain market share within others (e.g., financial services, government).
Or about adding some ML capabilities to their Automotive offerings...
Bottom line is there is potential, but it will take time...
Buy in now or averaging down now might be good. Then way away for three years...07-23-19 09:16 AMLike 0 -
Similarly, how did they entirely miss the run to $14.50 18 months ago? Why did that even happen given there was no real fundamental change in business, results, or strategy that we hadn't witnessed before or since several times?
How Does RBC have a market perform and a $9 target here, and a $70 target on CRWD. So how do you expect the market to perform then? -20% as per your CRWD prediction, or +30% as per your BB prediction? They're all over the place. TD has a target of $14+ IIRC, so who's right? As it stands now, even looking at the most bearish, all of them too optimistic unfortunately, given that almost everyone apparently expects BB to trade double digit percentages higher in a year, wouldn't that make it a solid buy on all fronts? 18 months ago every one was too pessimistic. Were they right then? Or are they right now? Or are they merely just providing editorial-like commentary worth just about as much as an article on seekinglapha?07-23-19 11:42 AMLike 3
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