Cybersecurity risks are evolving. Once focused around the likes of credit card numbers, passwords, and identity information, hackers’ have set their sights on more substantial and critical targets. Despite the risk of cyber vulnerabilities being a decades-old problem, many large companies, organizations, and even governments remain unprotected against the advanced capabilities seen with the modern hacker.
Over the past five years, we have seen cyber events influence government elections, comprise databases, and even leak data from multi-national corporations. However, the recent hacking events that have taken place over the past several months further highlights an urgent need to invest in advanced cybersecurity solutions. We are now seeing critical-to-extremely-critical infrastructure, from stock exchanges to nuclear weapons, being the target of attacks.
SolarWinds Hack Sets Off Flurry of High-Profile Cybersecurity Events
SolarWinds, a Texas-based software company, disclosed in late 2020 that hackers had breached its networks and were able to insert infiltration malware code into its Orion software upgrade. The update was later downloaded by roughly 18,000 SolarWinds clients, which immediately gave the hackers access to their networks and classified information.
Government agencies and multi-national corporations fell victim to the SolarWinds hack. Among those agencies impacted were the U.S. departments of Homeland Security, State, Commerce, Treasury, and the National Institute of Health. The Department of Energy’s National Nuclear Security Administration was also reportedly a target in the hack. With nuclear weapons now in the picture, there needs to be a clear dedication to investing in advanced cybersecurity.
Since SolarWinds, numerous other headlines began to flow through the newswires. In late January 2021, the New Zealand Stock Exchange fell victim to a distributed denial of service (DDoS) attack. Investigators quickly realized that their networks were faced with a tsunami of traffic from offshore locations that ultimately overwhelmed the servers and caused a shutdown.
In February 2021, a hacker infiltrated a water treatment plant in Oldsmar, Florida, and was able to increase the level of sodium hydroxide in the city’s drinking water “by a factor of 100.” After tampering with the chemical levels, the hacker left the system. Luckily, the plant operator was able to quickly revert the sodium hydroxide levels to normal levels. As of this article, the FBI has joined the investigation into the potential threat to the water supply.
“The hacker changed the sodium hydroxide from about 100 parts per million to 11,100 parts per million. This is obviously a significant and potentially dangerous increase. Sodium hydroxide, also known as lye, is the main ingredient in liquid drain cleaners. It’s also used to control water acidity and remove metals from drinking water,” noted Pinellas County Sheriff Bob Gualtieri.
Safe-T Group: Patented Technology, $5 Million Annual Revenues, Zero Debt, Global Presence
The recent cyberattacks highlight a very clear need for major governments, organizations, and corporations to begin taking digital threats seriously by investing in the necessary advanced protection. The days of simply using a virus scanner and a firewall are long over and with hacker’s capabilities continuing to improve, there is no way cybersecurity can sit on the back-burner any longer.
Market research firms are estimating a favorable outlook as well. According to ResearchAndMarkets, the global cybersecurity market is forecast to reach $174.09 billion by 2025, which represents a compound annual growth rate (CAGR) of 8% between 2020-2025.
Safe-T Group (NASDAQ: SFET)
Investors have been increasingly focused on cybersecurity stocks, as growth continues to favor the industry’s long-term outlook. One such company that is off to a great start in 2021 is Safe-T Group, Ltd. (NASDAQ: SFET).
Safe-T Group’s cybersecurity business is centered around its patented ZoneZero technology, which helps segregate internal networks to ensure only authorized users are granted access. ZoneZero also ensures secure data exchange to protect authorized users from exfiltration, malware, ransomware, and other threats.
ZoneZero’s unique duality allows organizations to provide secure access to on-premise and hybrid cloud environments. With the coronavirus pandemic continuing to keep millions of workers at home, ZoneZero is a key tool to help prevent unauthorized data access in the “new normal.”
The patented-protected technology is also the only secure access platform in the entire world that can either integrate with existing VPN platforms or replace existing infrastructure. This ensures that everyone working from home, in the office, non-VPN contractors, etc. can have secured access.
Safe-T Group’s preliminary full-year 2020 financials show very strong growth. For 2020, the company is estimating a revenue range of $4.85 million – $4.95 million. This represents year-over-year growth between 48%-51% compared to 2019 results. The company also disclosed that it has cash and equivalents of $13.8 million and has paid off all of its debt.
SFET: Comparable Company Valuations
Cybersecurity provider Appgate has agreed to merge with Newtown Lane Marketing Inc., a publicly traded shell company, according to people with knowledge of the matter. Appgate is a direct pure SDP competitor. Valued at $1 billion, Appgate is projected to deliver $40 million in revenue in 2021, and to post a 50% compound annual growth rate through 2025. Based on the current valuation and sales outlook, Appgate has a revenue multiple of 25.
By comparison, Safe-T Group looks to be undervalued when looking at revenue multiples. Currently Safe-T Group has a market cap of around $37 million. Preliminary full-year 2020 revenues are estimated to come in around $5 million. This gives Safe-T Group a revenue multiple of only 7.4. With Safe-T’s competitive edge and undervalued status against industry competitors, the company positions for a bright future.
Overall, cybersecurity’s outlook is very strong. With each new high-profile attack, a renewed sense of urgency kicks in to finally take digital threats seriously. Governments, major corporations, and organizations have all continuously been subjected to cybersecurity failures. Now that hackers are getting more advanced, governments and enterprises need to utilize advanced technologies like those offered by Safe-T Group.
Safe-T Group’s strong preliminary results for full-year 2020 are very encouraging and only further support the bullish thesis. Furthermore, the company’s global presence, patented-protected technology, and strong financial strength will likely help the company continue to thrive.
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