Sailpoint Technologies Holdings Inc (NYSE:SAIL), the Texas-based company offering enterprise identity solutions to companies eager to take cybersecurity more seriously, enjoyed a successful IPO Friday that saw its shares surge by nearly 20%. After the company priced its IPO at $12, it enjoyed Friday prices up to $14.90 per share, and piqued serious investor interest as it eyed out a further stake in the cybersecurity market.
SailPoint raised some $240 million in its IPO, a hefty figure likely to inspire more confidence in its backers as the capital is applied to expanding the company’s footprint in a burgeoning security market. After a slate of cyber security gaffes and data breaches, including a headline-grabbing fiasco for Uber, SailPoint’s industry is enjoying a burst of investment as companies and individuals alike scramble to better their cybersecurity.
While SailPoint has yet to attain consistent profitability, the company has shown serious revenue growth recently. Revenue grew some 34% from this time last year, jumping up to $118.3 million reported for the nine-month period ended September 30th. As interest in cybersecurity companies grows, SailPoint may yet enjoy even more growth as it scoops in more companies eager to better their data privacy operations.
A new era of cybersecurity
CEO Mark McClain certainly thinks the company has a bright future after the recent spate of data breaches; in an interview with CNBC, he highlighted the growing importance of information security and heightened cybersecurity in the 21st century, noting that companies like SailPoint, which help reassure larger corporations that their information is in good hands, have nowhere to climb but up in terms of market share.
While SailPoint is likely to enjoy a fresh crop of competitors eager to cash in on the industry’s current boom, the company could use the impressive amount raised in its IPO to further entrench itself in the industry as it broadens its appeal to more customers. As the Internet of Things continues to expand and consume whole new portions of the economy, a rising demand for better data security measures is likely to buoy companies like SailPoint for years, if not decades to come.
High-level data breaches like those besetting Uber and Equifax (NYSE:EFX) lately have a tendency to draw massive amounts of media attention, capturing eyeballs of everyday customers and CEOs alike as news of digital invasions of privacy spread like wildfire. Few industries, apart from self storage, stand to gain further from this than cybersecurity practitioners, meaning investors would be wise to get in on the ongoing digital gold rush while the getting’s still good.
Moving past losses
SailPoint still has work to do if it wants to secure such a rosy future for itself, however; while the company has enjoyed growths in revenue in recent years, it needs to remain cautious about the losses its posting. Net losses grew from $6.5 million in 2016 to $13 million in 2017, for instance, meaning the company will need to do more to trim the fat as it grows if it hopes to ride the cybersecurity tide all the way to the bank.
Profitability is likely to be achieved by SailPoint if it learns how to scale back its frivolous spending and manages to properly leverage the funds from its IPO, however. The company has been around since 2005, having already endured many digital revolutions that have shaken up the field of cybersecurity, and will likely continue to woe over customers with employee verification systems and other cybersecurity offerings. Modern cybersecurity strategies are an extraordinarily hot market; if it plays its cards right, SailPoint shouldn’t struggle to find business for years to come. With a steady hand at the wheel, the cybersecurity company may just excel and find itself at the top of the market; it just needs to carve out a healthy chunk for itself in a burgeoning industry, something it’s already gotten a start on.