Investment bank Jefferies is predicting a rebound in the share price of British cybersecurity firm Darktrace after two years of torrid profits. The turnaround appears to have already begun, with the share price up 75% in the past year to 446p and more than doubling since hitting an all-time low in early 2023. UK stocks are generally priced in pence, with 100 pence being equivalent to a pence. 1 British pound ($1.25). Stocks listed in London are also traded over the counter in the United States. “Darktrace has always framed fiscal 2024 as a year of two halves, with the first half stabilizing and the second half reaccelerating,” analysts at Jefferies, led by Charles Brennan, said in a statement. analysts said in a note to clients dated April 11. ignore. “With this in mind, the third quarter trading update indicates that the planned acceleration is occurring sooner than expected, driving a further increase in our outlook for fiscal year 2024.” added the analyst. DARK-GB 1Y Line cybersecurity company reported better-than-expected third-quarter financial results on April 11th. Annualized net recurring revenue, a key company metric that investors watch, increased 6% to $29 million, a significant improvement in momentum from the previous quarter. According to the company, sales increased by 26% during the quarter, and the churn rate improved slightly. Following the better-than-expected results, Jefferies raised its price target on Darktrace from 550p to 890p and reiterated its buy rating. The investment bank believes the valuation gap between Darktrace and peers such as CrowdStrike, Okta, and Zscaler will continue to narrow as the business accelerates. Darktrace operates in the fast-growing cybersecurity space, which Jefferies predicts will grow 9% annually. Jeffries believes Darktrace's technology and “growth first” model will enable the company to gain market share and “deliver superior growth over the medium term.” The consensus price target of analysts surveyed by FactSet suggests a potential upside of 24.4% for the stock. Brennan's price target is the highest among analysts covering the stock. The company was the subject of a short interest report last year. To ease investor concerns, it has appointed auditing firm EY to review the company's “key financial processes and controls.”
