McAfee Launches New Solution - Analyst Blog

Internet security company McAfee Inc. (MFE) rolled out its all-inclusive Risk Management solution to provide real time security for the information technology (IT) sector.

The solution performs real time threat detection activity along with the scanning of applications, networks and databases that may be positioned anywhere in the world.

An ideal risk management solution follows a prioritization process, whereby threats associated with greater losses and higher probability are handled first. This detection process then follows a descending order.

McAfee’s comprehensive solution will help an organization prioritize its IT-related risks, allowing them to protect most valuable company-specific data with the help of limited resources.

A risk management solution typically prioritizes IT-related risks faced by a company. McAfee’s product is different in the sense that it also correlates the data belonging to the company and the data that it interacts with, thus automating a process that has thus far been carried out manually. We are encouraged by McAfee’s innovation, as it explores a new approach to enterprise security.

We believe McAfee’s continuous efforts at innovation will enable it to spearhead major changes in the IT security space.

To further this objective, McAfee has formed the Security Innovation Alliance program, which enables the collaborative development of comprehensive security solutions. The company recently added several new partners to the program, which now spans across North America, Europe, the Middle East, the Asia Pacific and Japan.

Considering the trend for increased digitization, dependence on the Internet and the move toward cloud computing, the need for a secured IT environment will continue to increase. We therefore, believe that more organizations will devote funds to risk management solutions. Hence, we expect McAfee to witness rapid deployment of its enterprise security solutions, which will consequently strengthen its revenue base.

McAfee’s innovative solutions drove the company’s impressive first-quarter results, with total revenue increasing 12.0% from the year-ago quarter. The increase in revenue is attributable to growth across all business segments. However, earnings per share of 41 cents were below the Zacks Consensus Estimate of 50 cents per share. McAfee provided an encouraging guidance for the second quarter.

A strong product portfolio, growth prospects in all its served markets, acquisitions, customer win momentum and good cash generation ability are positives for McAfee. However, we are slightly concerned about the intense competition that the company faces from top industry players such as Microsoft Corp. (MSFT), Juniper Networks Inc. (JNPR) and Symantec Corp. (SYMC), as well as from hardware and software manufacturers entering the IT security business.

We currently have a short-term Zacks #3 Rank (Hold) rating on McAfee shares.
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