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IBM Fortifies Cyber Resiliency With New Cybersecurity Hub
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In a concerted effort to thwart the growing menace of cyberattacks and strengthen cyber resiliency, International Business Machines Corporation (IBM - Free Report) recently announced a multi-million dollar investment in Bangalore, India. The investment coincides with a paradigm shift in cyberattacks across the globe from North America and Europe to the Asia-Pacific region, making it imperative for the company to set up adequate training facilities in the East for effective security measures.
It is developing IBM Security Command Center and a new Security Operation Center in India for imparting training related to cybersecurity. Based on simulated cyberattacks, these facilities will offer immersive training exercises leveraging industry-leading audio and visual effects as well as live malware, ransomware and other real-world hacker tools. The IBM Security Command Center program has been designed by IBM experts in consultation with other domain experts from different industries, including emergency medical responders, active military duty officers, and its incident response experts. In addition to emergency and disaster response training models, IBM is offering customized experiences and workshops, both online and offline, to cater to specific user requirements.
With a capacity of 600 security response operators, the new Security Operations Center will provide Managed Security Services to more than 2,000 clients around the world -- managing more than 2 million endpoints and 150 billion potential security events per day. Leveraging artificial intelligence, machine learning and automation techniques, it brings together human expertise and advanced technologies for faster response, efficiency and transparency through a holistic approach to secure hybrid cloud environments. The addition of this facility brings the global Security Operations Center network locations to nine.
IBM expects its growth to be driven primarily by analytics, cloud computing and security services. A better business mix, improving operating leverage through productivity gains and increased investments in growth opportunities will likely drive its profitability.
However, IBM’s ongoing, heavily time-consuming business model transition to the cloud is likely to be a headwind in the near term. Although the public cloud market is expected to be one of the fastest-growing IT categories with about 25% to 30% CAGR over the next five years, IBM is unlikely to keep up with its competitors. High integration risks from continuous acquisition spree are potent challenges. In addition, weakness in its traditional business and foreign exchange volatility remain significant concerns. Also, higher profit on lower revenues indicates that the company has been lowering costs to maintain profits. We believe that the scope for further cost-cutting is limited. Consequently, if costs are further reduced, there could be a negative impact on product quality. It could also lead to an additional delay in launching products, denting its long-term growth potential to some extent.
The stock has lost 1.3% over the past year compared with the industry’s decline of 5.7%. We are impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
Hewlett Packard Enterprise Company (HPE - Free Report) , sporting a Zacks Rank #1 (Strong Buy), is a better-ranked stock in the industry. It has a long-term earnings growth expectation of 5.8% and delivered an earnings surprise of 14.4%, on average, in the trailing four quarters. Over the past year, Hewlett Packard has gained a modest 40%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for the current year for the stock have moved up 12.8% over the past year, while that for the next fiscal are up 26.4%. Hewlett Packard has been pursuing acquisitions to focus more on high-margin hybrid IT models that leverage on-premises and cloud-computing power. It views AI, Industrial IoT and distributed computing as the next major markets.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 10.8% since March 2021, while that for the next year are up 9.2%.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
Knowles Corporation (KN - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 10% and delivered a modest earnings surprise of 14.9%, on average, in the trailing four quarters. Earnings estimates for the current year have moved up 21% since March 2021.
The transformation from an acoustic component supplier to an audio solutions provider has enabled Knowles to migrate to higher-value solutions and increase content per device. This, in turn, has empowered the company to capitalize on the positive macro trends in audio and edge processing solutions.
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IBM Fortifies Cyber Resiliency With New Cybersecurity Hub
In a concerted effort to thwart the growing menace of cyberattacks and strengthen cyber resiliency, International Business Machines Corporation (IBM - Free Report) recently announced a multi-million dollar investment in Bangalore, India. The investment coincides with a paradigm shift in cyberattacks across the globe from North America and Europe to the Asia-Pacific region, making it imperative for the company to set up adequate training facilities in the East for effective security measures.
It is developing IBM Security Command Center and a new Security Operation Center in India for imparting training related to cybersecurity. Based on simulated cyberattacks, these facilities will offer immersive training exercises leveraging industry-leading audio and visual effects as well as live malware, ransomware and other real-world hacker tools. The IBM Security Command Center program has been designed by IBM experts in consultation with other domain experts from different industries, including emergency medical responders, active military duty officers, and its incident response experts. In addition to emergency and disaster response training models, IBM is offering customized experiences and workshops, both online and offline, to cater to specific user requirements.
With a capacity of 600 security response operators, the new Security Operations Center will provide Managed Security Services to more than 2,000 clients around the world -- managing more than 2 million endpoints and 150 billion potential security events per day. Leveraging artificial intelligence, machine learning and automation techniques, it brings together human expertise and advanced technologies for faster response, efficiency and transparency through a holistic approach to secure hybrid cloud environments. The addition of this facility brings the global Security Operations Center network locations to nine.
IBM expects its growth to be driven primarily by analytics, cloud computing and security services. A better business mix, improving operating leverage through productivity gains and increased investments in growth opportunities will likely drive its profitability.
However, IBM’s ongoing, heavily time-consuming business model transition to the cloud is likely to be a headwind in the near term. Although the public cloud market is expected to be one of the fastest-growing IT categories with about 25% to 30% CAGR over the next five years, IBM is unlikely to keep up with its competitors. High integration risks from continuous acquisition spree are potent challenges. In addition, weakness in its traditional business and foreign exchange volatility remain significant concerns. Also, higher profit on lower revenues indicates that the company has been lowering costs to maintain profits. We believe that the scope for further cost-cutting is limited. Consequently, if costs are further reduced, there could be a negative impact on product quality. It could also lead to an additional delay in launching products, denting its long-term growth potential to some extent.
The stock has lost 1.3% over the past year compared with the industry’s decline of 5.7%. We are impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
Hewlett Packard Enterprise Company (HPE - Free Report) , sporting a Zacks Rank #1 (Strong Buy), is a better-ranked stock in the industry. It has a long-term earnings growth expectation of 5.8% and delivered an earnings surprise of 14.4%, on average, in the trailing four quarters. Over the past year, Hewlett Packard has gained a modest 40%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for the current year for the stock have moved up 12.8% over the past year, while that for the next fiscal are up 26.4%. Hewlett Packard has been pursuing acquisitions to focus more on high-margin hybrid IT models that leverage on-premises and cloud-computing power. It views AI, Industrial IoT and distributed computing as the next major markets.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 10.8% since March 2021, while that for the next year are up 9.2%.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
Knowles Corporation (KN - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 10% and delivered a modest earnings surprise of 14.9%, on average, in the trailing four quarters. Earnings estimates for the current year have moved up 21% since March 2021.
The transformation from an acoustic component supplier to an audio solutions provider has enabled Knowles to migrate to higher-value solutions and increase content per device. This, in turn, has empowered the company to capitalize on the positive macro trends in audio and edge processing solutions.