Sophos Share Discussion Threads

[g9791] 28/3/2018 08:29

These are so volatile.

[wintokall] 25/3/2018 12:33

well done ! - finally someone who can put my thoughts into words - I have faith in Sophos and what they do - from my research etc.... it will be a winner - BUT DYOR !!

[solooiler] 25/3/2018 10:44

"The analysts have access to the same financial data so should have called out concerns about reliance on pre-payments, non-standard profit measures et al months ago. the forward PE on this stock is still huge even at £4, it may recover again before the May results as it is very volatile but price is only really going to go up again if they start turning a real profit."

Sorry, but I'm really laughing at this and really surprised no-one has bashed down this response. I don't even hold here but it seems there is a fundamental lack of understanding about the Sophos business model.

Why are there prepayments? Because like most cybersecurity software companies, Sophos gets paid up front on contracts that run over 1 year in length. How on earth is that something to complain about? Most businesses would love that. The issue is then that the period beyond year 1 goes into deferred revenue and is released later on. But that means that we should care about billings, cash EBITDA as this is how Sophos manages its expenses. Why would I want to care about EPS etc? It's all fictitious. Always remember the saying that we should be looking at cash flow, and that is exactly what the non standard metrics show.

Northern trust weirdly, therefore, said net debt to ebitda here is 4x. It sure is, but that's on a profitability metric that is stupid to use. They should have used cash ebitda and on that this is more like 1x levered. I'd be absolutely shocked if Sophos doesn't have its own covenants run off cash ebitda given that is what matters.

All this together, why the hell should I look at PE for Sophos? That's not going to catch up for a while because billings are growing so fast. I would want to be looking at levered cash flow yield here (Free cash flow divided by market cap). This looks like it is valued similarly to US companies like Palo Alto now.

Comprende mis amigos?

[greenrichard] 22/3/2018 16:00

Sophos (LSE:SOPH), a global leader in network and endpoint security, has been recognized at the PLC Awards 2017 as the winner of the Innovation in Technology award. Sophos is the first company in the PLC award’s 32-year history to win this award in successive years. The award, which was announced at a city event on March 15, 2018, acknowledges Sophos’ continued focus on innovation in next-generation endpoint and network security to drive growth and market success, since its initial public listing in 2015.

[greenrichard] 22/3/2018 15:56

Sophos (LON:SOPH)‘s stock had its “overweight221; rating reaffirmed by equities research analysts at Morgan Stanley in a research report issued to clients and investors on Thursday. They presently have a GBX 705 ($9.74) price target on the stock. Morgan Stanley’s price target indicates a potential upside of 52.93% from the stock’s previous close.

[g9791] 22/3/2018 08:16

No stability with these, just more craziness.

[thx1] 21/3/2018 16:57

someone bought over £2.7m right at the market close so hopefully share will stay stable tomorrow morning...

[discojames] 21/3/2018 16:22

I'm just as shocked by this flat lining, I haven't actually checked the volume traded in the last couple of hours but has everyone just moved on to pastures new?

[borg45] 21/3/2018 13:51

I'm doing the same with microfocas bought at 9.20 sold at 9.50 quick profit in that after I saw director buys

[borg45] 21/3/2018 13:48

Sold 4000 that I bought this morning £1600 profit as I saw it dipping will wait and see for my next entry

[discojames] 21/3/2018 13:45

Not quite, but I did sell then rebut them! Have clawed back about £4k but the worry continues as these are so volatile. Worried they hit resistance at 470 and are coming back down

[borg45] 21/3/2018 13:32

Stunning recovery!!! Bought more at 4.10 hoping for a bounce but these are nearly in orbit after the last two days !!! Hope you kept yours disco !!!

[g9791] 21/3/2018 09:21

Well Discojames, it is tempting to go in thinking the falls have finished and they will achieve their heights of recent times because that would mean extreme profits. Problem is 3 days of falls and more than 20% gone does make me very cautious of what else could come or even if they will get back to anything like they were. But, if you are brave enough to do it then good luck and if it comes good you deserve anything you get for taking the chance.

[rock star] 21/3/2018 08:47

I don’t think it is a basket case. More a question of underlying growth.

You always have to remember this came out of private equity and they know how to put a gloss on things.

Out of interest how much do the PE guys still have?

[discojames] 21/3/2018 08:42

Im so glad I left but also being a stupid man, I am tempted to rebuy at this level. I appreciate there may not be support from a chartist's point of view, but I can see mental support at 400 for many

[rock star] 21/3/2018 08:37

I have read the Northern Trust report. Not too much substance but the do tend to make good calls.

[g9791] 21/3/2018 08:35

Only support I can see they need is a trampoline.

[tsmith2] 21/3/2018 08:19

only Support on chart I can see is around 340p.

[g9791] 21/3/2018 08:16

A 3rd day and they are starting their downward spiral again. May well be into the £3.XX zone soon. Something must be wrong.

[epo001] 20/3/2018 14:56

If investors behave like headless chickens reacting to misinformation peddled by uninformed or hostile pundits then it could easily happen, perhaps Northern are manipulating the share price for their own purposes.

Suggesting that a company which sells subscriptions is over-reliant on pre-payments is on the surface of it like criticising Wetherspoons for being over-reliant on people walking in through the door. Saying there are similarities to MicroFocus without enumerating what those similarities are is merely spreading FUD.