Mandiant cloud subscription Boom or bust

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1

I have been looking at this company for a while. It seems like the slow-growing Fireeye section of the company was sold off to focus on threat intelligence, tangentially causing a correction from ~20.45 down to ~16.60. Mandiant will be switching to a subscription-based SaaS model in January. The SaaS cloud subscription is a solid model as several other tech companies are moving in that direction due to cost savings. Mandiant currently has U.S. government contracts, and with the spending bill out, it is conceivable that they will expand the business rapidly. I consider any price under $20 to be a good buy-in point.

(all pulled from the article and earnings report attached)
Important facts:

  • market value of $4.2 billion
  • $500 million share buyback
  • Repurchased $68 million worth of common stock in Q2’21
  • Q4’21 Divestiture (Symphony Technology Group)
  • $1 billion in annual revenues and billings.
  • Mandiant grew revenues 17% in Q2’21
  • Consulting and Security SaaS
  • Cloud subscription service starting 01/2021 for Active Breach & Intel Monitoring and Ransomware Defense Validation
  • newly separated company equates to over 50% of quarterly bookings at $131 million compared to only $118 million for the FireEye business
  • Mandiant grew revenues at a 17% clip in Q2’21
  • EV was ticking below $2.7 billion. The company ended Q2’21 with net cash of ~$260 million

Q2’21 presentation*

https://seekingalpha.com/article/4458627-mandiant-stock-new-company-better-value

(I haven’t had time to watch this yet.)
https://event.on24.com/wcc/r/3455384/4F1A4A94908B0C346D0539C051FBFF29

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Thanks for bringing up split with FireEye, I did not know that before reading this. I’ll have to look into what sets their Advantage SaaS platform apart - I feel like it is an already crowded market so it may be tough to steal some market share away from Crowdstrike and the like. I assume a significant portion of their business model consists of selling these security hardening services to their incident response customers after suffering a cyber event. With ransomware attacks projected to increase this could work out for them though in terms of an investment I would say long leaps if you are bullish as I do not see this as an explosive catalyst.

I’ve actually worked with them before, most of coworkers felt they were subpar in terms of consulting and IR services and the customers seemed to agree. That being said they are still a big player with solid fundamentals and I see the FireEye sale as a positive