Disclosure: Sekur Private Data Ltd. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price and Volume (1-year)
2023 revenue was up 27% YoY, beating our estimate by 9%. Q1-2024 revenue was up 2% QoQ, and 21% YoY, but missed our estimate by 10%, primarily due to reduced marketing initiatives
Revenue continues to be driven by individual users in the U.S. G&A and marketing expenses were lower than expected
EPS improved YoY in both 2023 and Q1-2024, meeting our estimates. Sekur has been able to reduce its CAC significantly.
As Q1 revenue fell short of our estimate, we are lowering our near and long-term revenue forecasts
However, since Q1 EPS was in line, driven by reduced CAC and management’s cost-cutting initiatives, we are maintaining our 2024 EPS estimate
As a result of our lower long-term revenue forecasts, our DCF valuation decreased from $0.61 to $0.47/share.
It is anticipated that the global email encryption market will grow by 21% p.a. over the next five years
As Sekur does not have any publicly traded comparables, we are continuing to not use a comparables valuation model. That said, we note that Sekur is trading at 3.5x revenue (based on our 2026 revenue forecast) vs the Application Software sector average of 6.7x (Source: S&P Capital IQ).
We are maintaining our BUY rating, and lowering our fair value estimate from $0.61/share to $0.47/share. We maintain a bullish outlook on the sector, driven by stringent data privacy regulations, and rising email data breaches, cyber threats, and security awareness.
We believe the company is exposed to the following risks:
