As Americans have seen several ransomware-induced shutdowns this year, with some bigger names like Colonial Pipeline and JBS Meat affected, it's no surprise that ransomware attacks surged 51 percent during the first quarter of 2021. As a result, cybersecurity companies are gaining attention. One of those companies is Deep Instinct.
Many investors are wondering whether it's ready to go public. Will Deep Instinct offer stock on the public market?
Deep Instinct brings deep learning to the cybersecurity space
Deep Instinct chairman Lane Bess appeared on Jim Cramer's Mad Money to discuss the company's role in ransomware prevention.
According to Bess, "The first opportunity we provide is prevention as a service. This is actually a new category that we're creating." Bess's previous companies focused on doing what other cybersecurity companies weren't. He's continuing that trend with Deep Instinct, using a deep machine learning approach.
Bess describes deep learning as "an autonomous set of learning and teaching algorithms that are built upon a platform." He likens this to Google's quick and automatic crawling innovations back in the day, but on a much more advanced scale.
Deep Instinct also offers a $3 million ransomware warranty for customers who are breached, which can help reimburse them for any ransom fees associated with attacks. This just goes to show how confident the company is in its proprietary software.
Does Deep Instinct have IPO plans in the works?
Deep Instinct remains privately held and hasn't announced any IPO plans, though it would be interesting to see a cash flow analysis, considering its generous warranty and reimbursement promises. Right now, Deep Instinct is focused on creating a robust prevention platform. Bess claims his company, which focuses on the pre-execution of ransomware or other cyber threats, could have prevented the infrastructure and service problems we've seen lately.
Alternatives to Deep Instinct stock while we wait for an IPO announcement
As investors wait for a Deep Instinct IPO, many are looking elsewhere, such as cybersecurity ETFs. Fortunately, the cybersecurity sector is robust.
Alternatives that are already on the public market include:
Mimecast (MIME), a cloud cybersecurity company that's undervalued as its revenue growth continues. Analysts foresee long-term strength in MIME, especially considering its year-to-date stability—its stock is just 0.3 percent in the red.
CrowdStrike (CRWD), whose revenue has risen 70 percent. Its stock has also grown consistently, with year-to-date, one-year, and five-year returns of 28, 163, and 302 percent, respectively.
Cloudflare (NET), which focuses on cybersecurity for external-facing resources. As the stock's trailing-12-month trailing returns are currently 204.47 percent, investors may want to wait for a correction before jumping in.