What Makes Cisco an Attractive Investment in Cybersecurity Space?



More sophisticated cyberattacks ensure increased spending on cybersecurity

Earlier in the series, we saw how WannaCry ransomware brought the world’s attention to sophisticated cyberattacks and consequently the rise in stocks of prominent cybersecurity companies.

Cisco Systems (CSCO) is a cybersecurity company that claims to be the largest security vendor in terms of revenue. In 2016, overall security appliance revenues rose 8.9% to $11.5 billion.

Cisco’s Cybersecurity Report states that revenue for approximately 33.0% of the companies that experienced a security breach fell 20.0%. More than 90.0% of companies are now improving threat detection technology for future cyberattacks.

The recent WannaCry ransomware attack suggests higher spending on cybersecurity by corporations as well as governments. Cisco, the largest security vendor, would benefit the most from this trend.

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Cisco Systems leads the security appliance market

With a 15.4% market share in 2016, Cisco Systems continues to retain its lead in the security appliance market. Next is Check Point Software Technologies (CHKP) and Palo Alto Networks (PANW), which held 12.9% and 11.9% of the market share, respectively. Fortinet (FTNT) and Huawei rounded out the top five players list, as you can see in the above table.

Next, let’s take a look at Morgan Stanley’s (MS) improved outlook toward Cisco.


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