3 Hot Cybersecurity Stocks In Focus Post Equifax Data Breach
Zacks Investment Research | Sep 10, 2017 10:49PM ET
Cybersecurity stocks were seen soaring last Friday, after Equifax Inc. (NYSE:EFX) reported a massive data breach. Per the company, highly sensitive personal data of approximately 143 million consumers has been stolen from its database. Reportedly, nearly two-third of the adult U.S. population has been affected due to this cyber attack.
The company late last Thursday announced that a data breach occurred between mid-May and July this year, which was discovered on Jul 29. Apart from some sensitive personal information, hackers have stolen credit card numbers of about 209,000 U.S. consumers and “certain dispute documents with personal identifying information” of nearly 182,000 U.S. consumers.
This is not the first instance when consumer data has been stolen from a company’s data base. However, sensitivity of the information exposed in Equifax’s data breach case makes it one of the worst in recent times. The latest data breach at the company will likely have a lasting impact as criminals can use the stolen resources for opening new accounts, applying for credit cards or loans, buying insurance, renting an apartment or even for tax frauds.
Shares of Equifax plunged nearly 14% last Friday after news of the cyber attack surfaced.
Cybersecurity Stocks Soar
The recent cyber attack at Equifax proved that most organizations across the world lack proper security measures.
Nonetheless, believe it or not, there is a positive side to this episode. A cyber attack is good news for cybersecurity companies because it increases the chances of security-related purchases by the companies and governments. Hence, investors flock to these shares, shooting up share prices.
Equifax’s Thursday’s announcement gave a sharp boost to cybersecurity stocks, particularly identity protection security providers.
Symantec Corporation (NASDAQ:SYMC) , which has been enhancing its identity-theft protection capabilities through acquisitions like LifeLock, gained the most with its shares witnessing a 3.4% rise.
This was followed by FireEye, Inc. (NASDAQ:FEYE) , which is specialized in providing web security, email security, file security and malware analysis. The stock gained 1.5% last Friday.
Another cybersecurity company, Proofpoint, Inc. (NASDAQ:PFPT) , went up 5.8% during trading hours. But it lost its momentum later to close at just 0.3% higher. The company is one of the leading security-as-a-service providers and focuses on cloud-based solutions for threat protection, compliance, archiving & governance, and secure communications.
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