09:50am EDT 5-Jun-00 Wit SoundView (Paul Saunders 415-217-5507) CERT
CERT: Certicom Reiterating Buy Rating
Certicom (CERT) Price: $49.50 Buy June 5, 2000
(FYE Apr) F00E F01E F02E Curr. Last Yr. Ago
Revenue ($M) $11.8 $20.8 $33.0 $3.7 $3.3 $1.5
EPS ($0.86) ($1.39) ($1.08) ($0.39) ($0.14) ($0.38)
Certicom* will announce this morning that the company is extending its product
line to include virtual private networking (VPN) client software. As part of
the announcement, Certicom will announce partnerships with Check Point Software,
Cisco, Intel, * As part of the alliances, Elliptic Curve Cryptography (ECC)
based VPN client software, developed by Certicom, will be included with the VPN
offerings of these and other vendors, allowing wireless devices to be connected
to an enterprise VPN. This is a positive announcement for Certicom and furthers
the company's efforts towards being a leading provider of products and services
for the emerging wireless security market.
We will wait for details to emerge on expected rollout timing and further
discussions with Certicom management before make any adjustments to our model.
We continue to believe that Certicom is well positioned to be a key wireless
security infrastructure provider and are reiterating our buy rating on the
stock.
A few details of the announcement.
Certicom will be bundling VPN client software based on elliptic curve
cryptography (ECC) with the offerings of VPN vendors such as Alcatel, Check
Point Software, Cisco, Cabletron, Intel, Nortel and other companies. The deal
is structured such that end customers who wish to extend their VPN to wireless
devices will pay Certicom a license per device. Complete details of the nature
of these licenses has not yet been disclosed, but a per device
subscription-based revenue model will most likely be employed. The agreements
with these partners stipulate that Certicom will work directly with end
customers, enabling Certicom to cross-sell other products to these customers
such as the recently released Trustpoint PKI software. Certicom will launch a
focused beta project this month and will be releasing a version of the VPN
software that integrates their ECC-based digital certificates by the first
quarter of CY01.
Impact of announcement.
We are waiting for details to emerge on expected rollout timing and further
discussions with Certicom management, before we make any adjustments to our
model. However, we feel this announcement is important for the company as it
further rounds out Certicom's portfolio of products and services to address the
security needs of the wireless environment. Check Point, Cisco and Nortel
represent a large of the market for VPN hardware and software, giving Certicom a
large customer base to target. In addition, we believe the endorsement of
Certicom's ECC-based security products by these vendors could lead to deals with
companies in this and other markets. |
