|Bid||235.16 x 800|
|Ask||236.52 x 900|
|Day's Range||231.34 - 238.43|
|52 Week Range||160.08 - 260.63|
|Beta (3Y Monthly)||0.64|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jun 3, 2019 - Jun 7, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||279.57|
In the latest trading session, Palo Alto Networks (PANW) closed at $235.48, marking a -1.65% move from the previous day.
Should you really "sell in May and go away"? While the old adage may prove true some years, when investing in stocks, follow rules, not calendars.
Check Point Software Technologies reported slim earnings and revenue growth that narrowly topped views for the first quarter. Shares of the firewall software maker fell in early trading.
If you look closely, there are signs of progress at FireEye (NASDAQ:FEYE). The cybersecurity company has been a disappointment, admittedly: FireEye stock once traded above $90, and now changes hands at $16. But FireEye generally has performed well in the past couple of years, and there's reason to see further improvements ahead.Source: David via Flickr (Modified)Growth in billings (which back out deferred revenue changes) shows demand is increasing, particularly as the company shifts from appliances to software. Operating margins are exceedingly thin, just 3% on an adjusted basis in 2018, which means earnings can jump sharply with even modest expansion.An ~80x multiple to the midpoint of 2019 EPS guidance makes it seem like FEYE stock is pricing in massive growth, but that's not quite the case. Margins can easily double or triple, which alone can move earnings substantially higher in coming years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut even with that case, and even with FireEye stock basically flat YTD, it's difficult to get too excited. Margin expansion looks priced in. So does decent billings growth. That's particularly true when considering stock-based compensation and the fact that investors shouldn't be willing to trust FireEye just yet. * 10 S&P 500 Stocks to Weather the Earnings Storm The Case for FireEye StockOn its face, FireEye stock looks ridiculously expensive. Multiples of 4x+ EV/revenue and ~80x earnings hardly seem fitting for a company that at the midpoint of guidance expects billings to grow 7%+ in 2019 - and revenue just 6.5%.Indeed, that guidance was disappointing, and it was the key reason why FEYE fell 12% after Q4 earnings back in February. But even with modest top-line growth, there's still a case that FireEye stock can grow into its valuation. Operating margins last year, as noted, were just 3%.That was a 300 bps improvement over the ~flat figure posted the year before. Full-year guidance projects margins this year of 5-6% - continuing the positive trend.Combine a move to 9-10% margins along with revenue growth and FireEye earnings double in relatively short order. Indeed, FEYE stock jumped last month when JPMorgan Chase (NYSE:JPM) analysts upgraded the stock for similar reasons. The firm saw revenue growth accelerating thanks to product improvements - which should leverage operating expenses and continue margin expansion.JPMorgan also pointed out that the shift to software impacts reported revenue and earnings, since upfront sales are recognized over the course of the contract. The firm said billings and cash flow were better metrics. Indeed, FireEye's free cash flow guidance for 2019 suggests generation of $50-$60 million. That's a more reasonable 58x P/FCF multiple at the midpoint.Double that thanks to margin expansion, and continue high-single-digit billings growth into the future, and FEYE can grow into, and beyond the current valuation. The firm gave FireEye stock a price target of $20, which is line with the average Street target at the moment, and suggests over 20% upside. The Case Against FireEye StockThere are reasons for caution, however. For one, it's not guaranteed that margins are going to expand continuously or at least at the same rate as seen in 2018 and 2019. Management did say on the Q4 conference call that it expected headcount to stay relatively flat this year.That's not necessarily going to be the case going forward. FireEye isn't guaranteed to get two or three points of operating leverage each year. If it doesn't, earnings growth might not be good enough. To drive upside, FireEye has to at least get EPS moving toward the $1 level. It's guided to just $0.17-$0.21 this year. Something like 200-300% growth is easily priced in already, and if margin expansion slows, that type of growth is going to take several years.The second issue is that cybersecurity is a tough space with no shortage of options. Indeed I called out 5 cybersecurity stocks for investors of varying styles earlier this month. Palo Alto Networks (NYSE:PANW) is the clear industry leader. ProofPoint (NASDAQ:PFPT) is the hot young growth stock. Carbonite (NASDAQ:CARB) offers a turnaround story of its own.There are plenty of reasons to like the sector but the plethora of options suggests investors can find an easier, better-priced bull case than the one offered by FEYE.Finally - as is so often the case in tech - there's the issue of stock-based compensation. FireEye is targeting operating margins of 5-6% next year, and $50-$60 million in free cash flow. Stock-based compensation last year was $153 million, over 18% of revenue.Even if that figure falls in 2019, it significantly colors non-GAAP results (from which the compensation is excluded). Is FireEye really generating mid-single-digit margins? Is it really generating $50M+ in free cash flow? Or is just accomplishing those feats by diluting shareholders? Good, but Not GreatThe underlying story when it comes to FireEye makes some sense, admittedly. Margins should get better. Billings growth should continue - and may even accelerate.But even with FEYE lagging the market so far this year, the valuation really isn't compelling. There's still a lot of work left to do in terms of building margins and a long time for investors to wait. Competition is going to be intense, and it's tough, as yet, to call out FireEye as a clear leader. Given all that, in a hot sector, it seems like there are better choices out there.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post The Case for FireEye Stock Isn't Strong Enough to Make It a Buy appeared first on InvestorPlace.
How Are Cybersecurity Stocks Trading Compared to Valuations?(Continued from Prior Part)Stock returns Cybersecurity (HACK) stock FireEye (FEYE) has taken investors on a volatile ride over the last few years. The stock generated returns of -16% in the
The birth of exchange-traded funds over the past several years has led to the birth of thematic stock investing, and that's a good thing. Specifically, ETFs -- through diversification -- allow investors to invest in themes, not stocks. This reduces the risks inherent in picking a single winner in an industry, while still giving investors exposure to the upside throughout the entire industry.In other words, thematic investing through ETFs is a great way to simultaneously reduce risk and maintain solid upside exposure.The key with ETFs, of course, is to pick the right ones. As opposed to picking the right stock, investors have to pick the right theme. This is easier to do than picking the right stock and the right theme. But, it still requires ample due diligence.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Stocks to Buy and Hold Forever With that in mind, let's take a look six big growth ETFs investors should consider if they are looking to invest in tomorrow's most important themes. First Trust Nasdaq Cybersecurity ETF (CIBR)The Big Idea: The value of cybersecurity will only dramatically rise in an increasingly digitally connected world.Key Holdings: Cisco (NASDAQ:CSCO), Fortinet (NASDAQ:FTNT), Palo Alto Networks (NYSE:PANW), Splunk (NASDAQ:SPLK) and Okta (NASDAQ:OKTA)Thanks to the widespread proliferation of the internet and rise of things like AI, IoT and the cloud, the consumer and enterprise worlds are becoming more digitally connected than ever before. Ostensibly, this is a good thing. But, we've been reminded recently of the downfalls of this unprecedented connection through various hacks and data security breaches. Broadly speaking, everyone and every company's data is running around on the internet, and that presents huge risks for both the individual and the enterprise.Cybersecurity solutions protect against these risks. Over time, as the world becomes more digitally connected, these risks will only grow. As they do, the value of protecting against these risks will grow, too. Consequently, the outlook for the whole cybersecurity space to rise dramatically in value over the next several years is favorable. That's why the First Trust Nasdaq Cybersecurity ETF (NASDAQ:CIBR) looks like a solid long-term holding. First Trust Cloud Computing ETF (SKY)The Big Idea: Everything is going to cloud, and as it does, the companies that provide cloud-based services will grow tremendously.Key Holdings: VMWare (NYSE:VMW), Salesforce (NASDAQ:CRM), Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT)Technology used to be delivered and stored on-premise. That is, you used to buy software at a store, bring it home or to the office, download it and use it on-site, with all the operations, data and workflow hosted on-site. Over the past several years, this process has changed thanks to the cloud. Now, there's no need to go to a store and buy anything. Services are delivered directly through and stored in the cloud, and this removes frictions related to on-premise delivery and storage. * 10 S&P 500 Stocks to Weather the Earnings Storm This revolution is well underway. That's why the First Trust Cloud Computing ETF (NASDAQ:SKYY), which focuses on companies that deliver cloud-based services, is up more than 100% over the past three years. But, only 20% of enterprise workloads have migrated to the cloud. At scale, that number will be closer to 100%. Thus, we are only one-fifth of the way through the cloud growth narrative, and that means SKYY still has lots of runway left to head even higher in the long run. iShares Expanded Tech-Software Sector ETF (IGV)The Big Idea: Software-as-a-Service (SaaS) stocks are winning investments, and this ETF gives you broad exposure to the world's best SaaS stocks.Key Holdings: Microsoft, Salesforce, Adobe (NASDAQ:ADBE), ServiceNow (NYSE:NOW) and Autodesk (NASDAQ:ADSK)SaaS stocks are winning stocks. Broadly speaking, these are high-growth companies with robust exposure to the cloud and software revolutions. They're also high-margin companies since costs associated with delivering cloud-hosted solutions at scale are relatively small. Further, they are often supported by steady and predictable revenue streams, which gives investors confidence regarding go-forward operational stability. Because of these winning attributes, the iShares Expanded Tech-Software Sector ETF (NYSE:IGV) is up 115% over the past three years.This big rally will continue. As stated earlier, only 20% of workloads have migrated to the cloud, so revenue growth potential remains huge. Plus, margins have lots of room to expand as the industry matures, and revenue predictability will likewise improve with scale. Overall, then, the three big tailwinds which have produced huge gains in IGV will persist for the foreseeable future, and that means that this big rally is far from over. Global Robotics and Automation Index ETF (ROBO)The Big Idea: The robots are coming, and companies that provide automation technology and services will profit tremendously in the long run.Key Holdings: Nvidia (NASDAQ:NVDA), Zebra (NASDAQ:ZBRA), Intuitive Surgical (NASDAQ:ISRG), Rockwell Automation (NYSE:ROK) and iRobot (NASDAQ:IRBT)One of the biggest trends over the next several years will be automation. Specifically, automated technologies will continue to get better and better, until they are good enough to largely replace human labor in many parts of the workforce. That's not great news for the labor market. But, it is great news for the companies that are leading this automation revolution, like Intuitive Surgical -- the company that is putting robots in the surgery room -- and iRobot -- the company that is putting robots in your house to clean your floors. * 7 Stocks to Buy for Spring Season Growth All of these leading automation companies are packaged into the Global Robotics and Automation Index ETF (NYSE:ROBO). As such, as the automation trends gain mainstream traction over the next decade, the ROBO ETF will explode higher alongside all the important automation stocks. Amplify Online Retail ETF (IBUY)The Big Idea: E-commerce is still in the early stages of a multi-year secular growth narrative, and e-commerce companies will continue to grow at a rapid rate for the foreseeable future.Key Holdings: Amazon, Wayfair (NYSE:W), Chegg (NYSE:CHGG), Etsy (NASDAQ:ETSY) and PayPal (NASDAQ:PYPL)One of the biggest growth narratives over the past several years has been the rapid rise in e-commerce. Companies like Amazon, Wayfair and Etsy have pioneered of new of era shopping from the comfort of your own home, and in so doing, have stolen tremendous market share from traditional retailers. Consequently, all those stocks have soared, as has the Amplify Online Retail ETF (NASDAQ:IBUY).These gains will continue. At the present moment, e-commerce sales represent just over 10% of total retail sales in the U.S. That's still a relatively small piece of the pie. Further, the whole industry continues to grow at a healthy double-digit rate. Thus, it increasingly appears as though we are still in the early stage of e-commerce's long-term growth narrative. As that narrative plays out over the next several years, the IBUY ETF will continue to rise. ETFMG Prime Mobile Payments ETF (IPAY)The Big Idea: Digital payments, and specifically mobile payments, are gaining massive traction, and the companies behind these payments project as big growers.Core Holdings: PayPal, Mastercard (NYSE:MA), Visa (NYSE:V), Square (NYSE:SQ) and American Express (NYSE:AXP)As digital shopping has grown, so has the digital payments world. When you shop online, you can't pay for an item with cash. You have to use a card or a digital payment account. Thus, cash has become less prevalent throughout the economy over the past several years, while digital payments have become more prevalent. This has led to huge gains in digital payment stocks like Master, Visa and Square, as well as in the Prime Mobile Payments ETF (NASDAQ:IPAY). * 7 Dental Stocks to Buy That Will Make You Smile As stated earlier, e-commerce sales only represent 10% of total retail sales, so that growth narrative is far from over. Consequently, the parallel digital payments growth narrative is likewise far from over. Specifically, within the digital payments world, we are going to see a huge rise in mobile commerce over the next several years as mobile-first apps like Instagram dive deeper into shopping. All of this implies big growth ahead for digital payments stocks and the IPAY ETF.As of this writing, Luke Lango was long PANW, CIBR, CRM, NFLX, AMZN, ADBE, NOW, ROBO, CHGG, PYPL and SQ. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post 6 Big Growth ETFs for Long-Term Investors appeared first on InvestorPlace.
How Are Cybersecurity Stocks Trading Compared to Valuations?Stock returns Cybersecurity stocks have generated impressive returns over the last few years. The Prime Cyber Security ETF (HACK) has gained 21% this year and 77% in the last three years.
Stock indexes rebounded Monday after selling off early on disappointing earnings for Wall Street bank heavyweights Goldman Sachs and Citigroup.
SANTA CLARA, Calif., April 15, 2019 /PRNewswire/ -- Palo Alto Networks (PANW), the global cybersecurity leader, today announced the appointment of Lorraine Twohill, chief marketing officer at Google LLC (formerly Google Inc.), and the Right Honorable Sir John Key, former member of Parliament and prime minister of New Zealand, to the company's board of directors. "As we continue to advance our cybersecurity leadership and help organizations navigate their cloud transformation, I am pleased to welcome both Lorraine and Sir John to our board of directors," said Nikesh Arora, chairman and CEO of Palo Alto Networks.
Stock futures: The major averages are nearing record highs with top stocks setting up as stock market plotlines converge.
The VPN apps built by four vendors — Cisco, Palo Alto Networks, Pulse Secureand F5 Networks — improperly store authentication tokens and session cookieson a user's computer
Stock futures: With software again leading the stock market, Palo Alto Networks, Workday, Match, Paylocity and HubSpot are 5 top stocks near buy points.
It has been almost a year since the last annual Sohn Conference held in New York, and we thought it would be interesting to take a look at how some of the stock pitches presented there have performed since. Today, we are going to take a look at Light Street’s Glen Kacher’s best idea from […]
Palo Alto Networks Inc NYSE:PANWView full report here! Summary * Bearish sentiment is low Bearish sentimentShort interest | PositiveShort interest is low for PANW with fewer than 5% of shares on loan. The last change in the short interest score occurred more than 1 month ago and implies that there has been little change in sentiment among investors who seek to profit from falling equity prices. Money flowETF/Index ownership | NeutralETF activity is neutral. The net inflows of $1.94 billion over the last one-month into ETFs that hold PANW are not among the highest of the last year and have been slowing. Economic sentimentPMI by IHS Markit | NeutralAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Technology sector is rising. The rate of growth is weak relative to the trend shown over the past year, however. Credit worthinessCredit default swapCDS data is not available for this security.Please send all inquiries related to the report to firstname.lastname@example.org.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Software leaders Fortinet and Palo Alto Networks showcase another source for finding potential breakout stocks.
We have highlighted three tech stocks that investors might want to consider buying right now that offer exposure to the internet of things, cloud computing, and cybersecurity. All of these stocks also sport a Zacks Rank 2 (Buy) or better right now.
The stock market rallied early Friday after a strong jobs report before the market open. Apple stock is approaching a potential entry.
On the way to taking the firewall market crown, Palo Alto Networks PANW developed considerable customer switching costs, in our view. Palo Alto is expanding its subscriptions to cover hybrid cloud security concerns with items such as analytics, automated response, and machine learning, which we see as growth catalysts to supplement its strong firewall offerings. Palo Alto became a leading cybersecurity provider with its next-generation firewall appliance, forever altering the requirements of this essential piece of networking security.
See who joins Amazon, Paycom, Palo Alto Networks, Atlassian, and Arista Networks on this list of the fastest-growing large-cap stocks.
Cybersecurity stocks have been among the best stocks in the market in recent years. The ETFMG Prime Cyber Security ETF (NYSEARCA:HACK) has gained 69% in the past three years -- easily outperforming the broader market.There are plenty of reasons to believe that outperformance will continue. After all, high-profile data breaches continue to occur. This week, for instance, TechCrunch reported that privately held Arizona Beverages was the victim of a crippling ransomware attack. The incident is yet another lesson that companies cannot cut corners when it comes to security protection. * 10 Medical Marijuana Stocks to Cure Your Portfolio To be sure, investors are aware of the trend. Cybersecurity stocks aren't cheap. But for investors willing to pay up, the sector is large enough to offer a variety of options. These five cybersecurity stocks offer different bull cases for different types of investors.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Palo Alto Networks (PANW)Source: Shutterstock Palo Alto Networks (NYSE:PANW) might be the simplest, "set it and forget it", play among cybersecurity stocks. Palo Alto has successfully transitioned away from a reliance on hardware and jumpstarted growth in the process. Revenue in the fourth quarter, for instance, rose over 30% year-over-year, crushing analyst estimates.At the moment, Palo Alto is the largest cybersecurity play … and the most diversified. If the market as a whole continues to grow, Palo Alto Networks should benefit.That said, there are concerns, as I wrote after earnings. PANW stock isn't cheap. And we've seen the cloud story break down elsewhere as spending has slowed. PANW is the biggest stock in the space, and it has the simplest bull case. It's going to rise if its market keeps growing. But at this point, it may be one of the better cybersecurity stocks, but not necessarily one of the best stocks in the space. Symantec (SYMC)Source: Shutterstock As noted earlier, cybersecurity stocks aren't cheap, and value plays are hard to find. Symantec (NASDAQ:SYMC) might be the cheapest stock in the space, but there are reasons.Growth has stalled out. Fiscal 2019 guidance, which disappointed and then was pulled further down, suggests a year-over-year decline in revenue and earnings. An accounting investigation has only added to the pressure on SYMC stock. A continuing reliance on PC-related revenue makes the stock less exposed to growth on the enterprise side of the industry.That said, SYMC has a path to upside. Private equity firm Thoma Bravo has reportedly considered acquiring the company. Symantec itself is making acquisitions to build out its enterprise business, acquiring Israeli cloud security provider Luminate Security in February. * 10 Stocks That Every 30-Year-Old Should Buy and Hold Forever And the stock is cheap, at 13x next year's earnings-per-share estimates. If Symantec can continue to build out its enterprise business, that valuation might be far too low. Secureworks (SCWX)Source: Shutterstock Secureworks (NASDAQ:SCWX) is one of the best stocks in the sector for traders. Secureworks focuses on software-driven solutions, predominantly through a SaaS (software-as-a-service) model.And SCWX stock might be in play. Dell Technologies (NASDAQ:DELL) owns 86% of the company and is looking to pay down debt. Reuters reported in February that Dell was considering a sale, which might make some sense. Secureworks isn't as material to the Dell business as VMWare (NYSE:VMW) and it might perform better as an independent company or as part of a larger security provider.Meanwhile, SCWX stock has pulled back of late and it looks cheap enough to garner some interest. Profits are still miniscule, but revenue is growing -- and an acquirer might be willing to pay a premium to the current sub-3x price-to-sales multiple. SCWX's opportunity is solid enough on its own long-term, but there's a decent chance a buyout offer could spike SCWX stock in 2019. ProofPoint (PFPT)Source: Shutterstock For investors who like chasing growth, the cybersecurity sector has some of the best stocks. One of them is Proofpoint (NASDAQ:PFPT). Proofpoint continues to post huge increases in revenue and profits, with sales up 35% in Q4. As a result, PFPT has rallied strongly, gaining 47% already in 2019. * 7 Energy ETFs That Could Be Running Out of Fuel At current levels, PFPT is challenging all-time highs. And it's not cheap, at 9x revenue and 55x forward EPS estimates. But there's room for upside from a technical perspective if the stock can bust through resistance. And there's room for upside from a fundamental perspective too … if its current growth continues. Investors willing to pay up for growth should take a long look at PFPT stock. Carbonite (CARB)Source: Shutterstock For investors who appreciate business transformations, meanwhile, Carbonite (NASDAQ:CARB) might be the play. Carbonite started as a largely consumer-focused company. But it has expanded into small and medium businesses with help from an aggressive M&A strategy.That strategy continued this year, with the recently closed $619 million acquisition of Webroot. Yet even with those deals driving growth, CARB looks reasonably cheap. Pro forma for the Webroot purchase, the stock trades at 11-12x 2019 EBITDA guidance. Looking to 2020, analysts see well over $2 per share in EPS.With a sharp pullback of late, that suggests just an 11x forward EPS multiple. That might be far too cheap -- particularly if the strategy here is on point. While larger rivals chase larger deals, Carbonite might be able to create value by chasing smaller fish.As of this writing, Vince Martin was long shares of Dell Technologies. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Low-Priced Tech Stocks With Great Potential * 9 Stocks That Would Be Hurt By a Mexico/U.S. Border Closure * The Era of Car Ownership Is Over. And These 4 Charts Prove It Compare Brokers The post 5 Cybersecurity Stocks to Watch As the Trend Heats Up appeared first on InvestorPlace.
Updates from Alphabet: Smart Speakers, Google+, and Other Bets(Continued from Prior Part)Chronicle launches cybersecurity product called Backstory Alphabet’s (GOOGL) little-known subsidiary called Chronicle is going for a huge prize: the $300
BlackBerry's (NYSE:BB) fourth-quarter earnings featured strong results and decent guidance. Going forward, BB and BlackBerry stock continue to have multiple strong, positive drivers, including continued expansion of QNX, synergies between core BlackBerry offerings and those of Cylance, continuous, strong licensing revenue and an effective executive team.Source: Shutterstock Despite all of these positive catalysts, some on Wall Street, as I previously predicted might happen, were concerned about the impact of the Cylance deal on the company's near-term profit margins. Those concerns weighed heavily on BlackBerry stock on Monday.Although BB stock may drop back to $8.50 or so over the next month, investors with a time horizon of a year or more should buy BB stock on pullbacks, since the company's longer-term outlook is definitely extraordinarily bright.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHere are five key takeaways from the company's Q4 results and its earnings conference call. Impressive Q4 Results and Decent Guidance, Attractive ValuationBlackBerry's overall fourth-quarter results easily beat expectations on both the top and bottom lines. The revenue of the company's BlackBerry Technology Solutions unit jumped nearly 20% year-over-year to $55 million, an encouraging increase that indicates that the company's previous QNX deals are starting to generate rapidly increasing revenue. BlackBerry's licensing and IP revenue jumped over 70% to $99 million. The unit is likely to continue generating strong revenue going forward. * 10 Tech Stocks That Transformed Their Business Finally, the top line of BlackBerry's Enterprise Software and Services (ESS) fell roughly 15% year-over-year, but both the company and multiple analysts blamed the decline on a new accounting standard. One analyst, TD Securities' Daniel Chan, said that the timing of a major deal also contributed to the YoY decline.Moreover, BlackBerry CEO John Chen said during the company's earnings conference call that ESS' "billings grew strongly on a sequential basis," while BB expects the unit's revenue to rise this year. The CEO noted that he expects the top line of the company's unified endpoint management (UEM) offerings, which make up much of ESS' revenue, to rise by about 10% in FY20, which began in February. He also reported that BB had received over 400 orders from banking customers during the quarter, while the unit also received orders from all three major branches of the U.S. military. All of that information certainly bodes well for the futures of the ESS unit, BB overall and BlackBerry stock.Turning to the company's guidance, using the data Chen provided, BB appears to expect, at the mid-point of its 23%-27% FY20 revenue growth guidance, about $1.13 billion of overall revenue in FY20.Chen explained that the company is "investing for growth," and will have to spend money on integrating Cylance, causing its expenses to rise meaningfully. But the CEO emphasized that the company's profitability will rise throughout the year, meaning after Q1, it will likely be profitable after the current quarter. Additionally, BlackBerry did not clarify the extent to which the guidance includes potential large settlement deals, with court verdicts against a number of companies that BB has sued for patent infringement, including Facebook (NASDAQ:FB), Twitter (NYSE:TWTR) and Snap (NYSE:SNAP).Based on price-sales and price-book ratios, the current valuation of BlackBerry stock is meaningfully lower than that of a number of other companies that focus on IT security. For example, using Chen's guidance and excluding cash, the forward price-sales ratio of BB stock is 4.66, versus forward price-sales ratios, excluding cash and based on analysts' consensus 2019 revenue estimates of 9 for Check Point (NASDAQ:CHKP), 7.5 for CyberArk (NASDAQ:CYBR) and 6.1 for Fortinet (NASDAQ:FTNT). The price-book ratios of CyberArk, CheckPoint and Fortinet are 12.8, 5.2 and 14.3, respectively, versus 2 for BB stock, according to Yahoo Finance. QNX and Radar Are Rapidly ExpandingQNX generated a huge number of design wins -- 22 -- in Q4. Moreover, the operating system's design wins expanded to areas beyond automotive, with eight of the design wins in areas other than automotive. Chen said he expects QNX's revenue to rise 16% this year. Both the high number of design wins and the expansion beyond automotive bode very well for BlackBerry's results and for BlackBerry stock over the long term.Radar, the company's asset-tracking system, added eight new customers in Q4 and received nine repeat orders from existing customers. Additionally, "a number of very large customers" are interested in Radar, Chen stated. Licensing/IP Revenue Will Continue to Be Strong IndefinitelySome analysts and investors who have been bearish on BlackBerry stock have sought to portray the company's licensing and IP revenue as "lumpy" and unreliable. Meanwhile, the fact that the unit's revenue jumped $41 million or 71% YoY in Q4 led some on the Street to assert that it was primarily responsible for the company's better-than-expected results. Taken together, these views may have caused the Street to discount BlackBerry's overall Q4 beat as a one-time phenomenon.But during last week's conference call, Chen and the company's CFO, Steve Capelli, took pains to demonstrate that the licensing and IP revenue will continue to flow indefinitely.Capelli said that the company has been able to deliver "consistent" IP and licensing revenue due to its "pipeline" of patents, while Chen said that the company expects the unit's revenue to drop only 5% this year. He also noted that BB has 10 or 11 years remaining on most of its current patents, has applied for over 100 more patents. and acquired more patents through its Cylance deal. So the owners of BlackBerry stock should expect the company's licensing and IP revenue to be consistently strong going forward. Strong Synergies Between BB and CylanceThe only disappointing part of BlackBerry's results was the guidance for Cylance, which is not expected to be profitable until next year and whose revenue is expected to rise "only" 25%-30%.Nonetheless, it's clear why Chen decided to acquire Cylance. It's strong in PCs and laptops, Chen said, while BlackBerry's strength lies with mobile devices. The acquisition will enable BlackBerry to sell more of its core products to companies that emphasize PCs and laptops, while introducing Cylance's products to companies that focus on securing their mobile devices. Companies that worry about the security of both mobile devices and PCs will now be able to meet all of their security needs with BB. * 10 F-Rated Stocks to Sell in This Narrow Market As I've noted previously, Cylance should make BlackBerry's offerings more appealing to governments. Meanwhile, QNX should be strengthened when Cylance is integrated into the operating system, and BlackBerry should be able to sell its products to many of Cylance's small and medium-sized customers. Finally, the fact that Verizon (NYSE:VZ) recently decided to offer Cylance's products to its customers should boost BlackBerry's results and is a tremendous vote of confidence in Cylance's technology. The Executive Team Has Been StrengthenedChen announced that he was dividing the company into three units; COO Bryan Palma, who has worked for multiple Fortune 500 companies and has a cybersecurity background, will lead BTS (dominated by QNX) and ESS, along with the company's other Internet of Things businesses; Cylance co-founder and CEO Stuart McClure will continue to head Cylance and Capelli will be in charge of the Licensing and IP unit.All three men will report to Chen.I believe that the change is a vote of confidence by Chen in the company's business and outlook, as it indicates that he believes the company is healthy enough for him to step back from managing its day-to-day operations. Additionally, Palma's success at high-level positions in Fortune 500 companies and McClure's track record of building Cylance into a top-notch IT security company indicate that their leadership should be positive for BlackBerry and BlackBerry stock. Finally, the move should free up Chen to focus more on making higher-level deals and partnerships.As of this writing, Larry Ramer owned shares of BlackBerry stock. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Transformed Their Business * 8 Genomic Testing Stocks That Can Ease the Sting of Theranos * 7 Weak Blue-Chip Stocks to Trim Immediately Compare Brokers The post BlackBerry Stock Is Bound to Head Much Higher in the Long Run appeared first on InvestorPlace.