Proofpoint, Inc. – Value Analysis (NASDAQ:PFPT) : December 19, 2017

Capitalcube gives Proofpoint, Inc. a score of 21.

Our analysis is based on comparing Proofpoint, Inc. with the following peers – Microsoft Corporation, FireEye, Inc., International Business Machines Corporation, Qualys, Inc., Symantec Corporation, Intel Corporation, CYREN Ltd., HP Inc., Zix Corporation and VMware, Inc. Class A (MSFT-US, FEYE-US, IBM-US, QLYS-US, SYMC-US, INTC-US, CYRN-US, HPQ-US, ZIXI-US and VMW-US).

Investment Outlook

Proofpoint, Inc. has a fundamental score of 21 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Taking peer performance into consideration, relative performance over the last month and last year is around the peer median.
  • It currently trades at a Price/Book ratio of (124.84).
  • PFPT-US‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).
  • PFPT-US has relatively low profit margins and median asset efficiency.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • PFPT-US‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • PFPT-US‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful for an analysis between historical growth (using annualized three-year revenue growth) and investor growth expectations (as suggested by P/E or Price/EBITDA) .
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.

Access our research and ratings on Proofpoint, Inc.

Leverage & Liquidity

  • Of the 10 chosen peers for the company, only 8 of the stocks have an outstanding debt balance. Companies with no debt include QLYS-US and ZIXI-US.

PFPT-US has maintained its Constrained profile from the recent year-end.

  • PFPT-US‘s interest coverage is its highest relative to the last five years and compares to a low of -181.24x in 2012.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (-3.01x) and the peer median (13.58x).

Access the detailed analysis for Proofpoint, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Microsoft Corporation 18.21 3.12 10.68 45.91
FireEye, Inc. 40.23 1.99 -4.89 2.72
International Business Machines Corporation 22.1 1.41 15.48 33.47
Qualys, Inc. 0 2.48 No interest exp 999
Symantec Corporation 36.25 1.12 0.6 10.2
Intel Corporation 16.38 1.6 18.98 71.18
CYREN Ltd. 0 0.96 -86.23 -86.05
HP Inc. N/A 1 13.58 52.46
Zix Corporation 0 1.09 282.3 999
VMware, Inc. Class A 5.84 2.86 34.14 91.07
Proofpoint, Inc. N/A 1.45 -3.01 14.08
Peer Median 16.38 1.45 13.58 45.91
Best In Class 5.84 3.12 No interest exp 999

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Company Profile

Proofpoint, Inc. is a security and compliance company, which engages in the provision of cloud-based solutions. Its security-as-a-service platform comprises of on-demand data protection solutions, including threat protection, incident response, regulatory compliance, archiving, governance, eDiscovery, and secure communication. The company was founded by Eric Hahn in June 2002 and is headquartered in Sunnyvale, CA.

Disclaimer

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