Barracuda Cloud Shift Could Boost Fiscal Q2 Earnings

Barracuda Networks' (CUDA) security offerings for (AMZN) and Microsoft (MSFT) cloud platforms could bring fiscal Q2 upside, say analysts, with consensus estimates calling for revenue growth of 9% and EPS rising 26%.

Campbell, Calif.-based Barracuda reports earnings after the market close on Tuesday.

Analysts expect Barracuda to report profit of 13 cents per share for the three months ended Aug. 30, up 26% from the year-earlier quarter. Revenue will grow 9% to $85 million, analysts estimate.

Barracuda focuses and small and medium-sized businesses. Barracuda is transitioning to cloud-based security from network appliances.

Barracuda has ramped up email protection and next-generation firewalls that support Amazon Web Services and Microsoft Azure, the leading cloud computing services. Barracuda also provides support for Microsoft's Office 365 cloud products.

IBD'S TAKE: Barracuda has among the highest Composite Ratings in IBD's Computer Software-Security group, along with Palo Alto Networks and CyberArk Sofware. The group is ranked No. 35 out of 197 groups. Even so, no security software company, for now, is on the IBD 50 list of top-performing stocks over the past 52 weeks.

For the current fiscal Q3, analysts estimate 7% revenue year-over-year growth to $85 million, and EPS growth of 68% to 12 cents.

Barracuda Networks stock was up nearly 2.5% in morning trading in the stock market today, near 24.50. Shares touched a one-year high of 25.77 on Sept. 28.

As more business workloads shift to AWS, Azure and other cloud platforms, spending on cloud cybersecurity is expected to rise.


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