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ZeroFox Holdings, Inc.NasdaqGM:ZFOX Stock Report

Market Cap US$142.3m
Share Price
n/a
US$0.99
n/aintrinsic discount
1Y39.9%
7D0%
1D
Portfolio Value
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ZeroFox Holdings, Inc.

NasdaqGM:ZFOX Stock Report

Market Cap: US$142.3m

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

ZeroFox Holdings (ZFOX) Stock Overview

ZeroFox Holdings, Inc. engages in the provision of software-as-a-service-based external cybersecurity solutions that focuses on exposing, disrupting, and responding to threats outside the traditional corporate perimeter. More details

ZFOX fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance0/6
Financial Health1/6
Dividends0/6

Rewards

Trading at 28.6% below our estimate of its fair value

Risk Analysis

Earnings have declined by 47.8% per year over past 5 years

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year

Significant insider selling over the past 3 months


ZFOX Community Fair Values

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ZeroFox Holdings, Inc. Competitors

Price History & Performance

Summary of share price highs, lows and changes for ZeroFox Holdings
Historical stock prices
Current Share PriceUS$1.14
52 Week HighUS$1.25
52 Week LowUS$0.41
Beta0.24
1 Month Change0.89%
3 Month Change2.24%
1 Year Change39.91%
3 Year Change-88.53%
5 Year Changen/a
Change since IPO-88.78%

Recent News & Updates

Recent updates

Analysis Article • Dec 28

ZeroFox Holdings, Inc.'s (NASDAQ:ZFOX) Revenues Are Not Doing Enough For Some Investors

ZeroFox Holdings, Inc.'s ( NASDAQ:ZFOX ) price-to-sales (or "P/S") ratio of 0.5x might make it look like a strong buy...
Analysis Article • Nov 22

Are Investors Undervaluing ZeroFox Holdings, Inc. (NASDAQ:ZFOX) By 42%?

Key Insights Using the 2 Stage Free Cash Flow to Equity, ZeroFox Holdings fair value estimate is US$1.23 ZeroFox...
Analysis Article • Jul 13

A Look At The Intrinsic Value Of ZeroFox Holdings, Inc. (NASDAQ:ZFOX)

Key Insights ZeroFox Holdings' estimated fair value is US$1.21 based on 2 Stage Free Cash Flow to Equity ZeroFox...
Seeking Alpha • Oct 19

ZeroFox: Operates In A Large TAM With Several Growth Drivers

Summary There is a growing need to step up cyber security as the world gets more digitized. ZFOX provides mission-critical external cybersecurity solutions to its customers around the world. ZFOX's combination with IDX has meaningful synergies. Thesis highlight I recommend going long on ZeroFox Holdings, Inc. (ZFOX) ($5.16 as of this writing). It operates in an industry that is facing growing demand as the world gets more digitized and operate in the net. If ZFOX continues to execute and further penetrate the market, it could yield investors significant upside. Company overview ZFOX is a cybersecurity enterprise that has recently merged with IDX. It deals with all of the cyber threats and risks of its customers. ZFOX protects its clients from external cyber threats and risks throughout their entirety. The term "external cybersecurity" is used to describe the protection of a company's systems, devices, and digital assets from attacks that originate from outside the company's endpoint and firewall systems. The ZeroFox platform offers businesses the external threat intelligence and protection they need to prevent and respond to online data breaches, as well as prevent attacks on their brands, people, systems, assets, and data. IDX is a provider of data breach response services and associated identity and privacy protection services to both government and commercial entities. IDX offers identity and privacy protection services through its own cloud-native platform and other channels to protect people who have been affected by a data breach. The integration of IDX's and ZFOX's ensures that the platform supports not only expanded use cases and additional cross-sell synergy opportunities between ZFOX's and IDX's customer bases, but also future growth. The combination gives companies a unique competitive advantage by giving them the ability to protect themselves from external cyberattacks and provide breach response services if they are attacked from the outside. This covers the entire lifecycle of the external cybersecurity market. Investments merits Growing need to step up cybersecurity The enterprise's cybersecurity, governance, compliance, and risk management teams are mostly under-resourced and overwhelmed with an influx of issues. This leads to a probability of high-priority threats as they lack purpose-built applications to cater to the cyber threats and risks. Insufficiently prepared organizations are always prone to falling prey to external cyber threats and risks and may fall victim to cybercrime. Generally, external threats are usually caused by disgruntled or untrained employees and comprise individuals who are not employees or affiliated with an organization. External cyberattacks may result in loss of both revenue as well as increased liability following the compromise or breach of sensitive customer data or intellectual property. This may also be a foray into their business disruption, extortion, and impaired reputation. Cybersecurity leaders need a single source of truth and a consolidated external cybersecurity platform to provide broad visibility and defensibility in the 'digital-first' world. External cybersecurity solutions call for the ability to quickly assess and understand an organization's digital horizon, to then correlate that information, and ultimately take action to prevent cyber-attacks, limit the exposure, remediate an incident, and disrupt the adversary. This area of the cyber landscape is becoming increasingly relevant since malicious events can become major disruptors of a business, its brand, reputation, supply chain, ability to interact online, conduct commerce, and operate in a normal course. It is a known fact that cybersecurity has a large total addressable market ("TAM") with a number of verticals, whereas ZFOX is a major player in external cybersecurity. The external cybersecurity market opportunity involves managing several different types of technology at the same time. This includes, but is not limited to, the following important parts: ZFOX Sept 22 presentation In an increasingly digital-first world, ZFOX believes that to effectively manage the external cybersecurity landscape, an organization needs personnel, systems, and software combined with continuous identification, protection, and breach response capabilities. Organizations attempt to manually integrate data, workflows, and responses across multiple vendors, the collective effort of which is sometimes referred to as "swivel chair security." Security teams become fatigued after failing to align these critical processes. When security systems and platforms aren't integrated and produce threat data but can't take action to fix the problem, it can be hard for cybersecurity teams to handle. ZFOX is designed in such a way that it can offer any organization a much safer, more integrated solution that caters to modern-day cyber security threats. This includes an efficient and aggregated management system that never compromises the security of its customers. Be it the actions of any organization or assets and other intellectual property, every minute is taken care of with the utmost intensity. ZFOX understands that growth in this industry is also propelled by several other factors and works on them, such as: Remote work: Work from home has become a trend. However, this shift is likely to drive decentralization of corporate IT beyond the protection of the traditional perimeter. This could make it more likely that malicious risks will get into a company's systems, applications, and workflows. Increased ransomware attacks: The casual attitude of some government and non-government organizations has had disastrous consequences. Criminals and hackers find it easier to breach their firewalls and gain access to all the information they require, which is often highly sensitive and, in some cases, of national importance. Shortage of adequate cyber security staffs: There is a dearth of experienced and smart cybersecurity personnel. The ZeroFox Platform ZFOX provides mission-critical external cybersecurity solutions to its customers around the world. Customers rely on them to help them solve important cybersecurity problems and challenges they've faced so far, and they look to them for advice on problems they'll face tomorrow. This platform is so intensive that it employs a continuous digital identification and detection program that is persistent to adversary disruption, which in turn supports an extended variety of cyber security cases. Most of the time, ZFOX's customers start out by buying one or two of the core components. Over time, their investment tends to grow. Built on a modern "cloud-native technology" architecture that supports core capabilities, the ZFOX platform is powered and protected by patented artificial intelligence capabilities and solutions. It is an integrated ecosystem that is built on top of their platform's API. This enables them to extend technology investment in ZFOX, thereby maximizing their customers' investments in other cybersecurity categories as well. Their unique app library boasts numerous connected apps to allow their customers to integrate their security as well as operational processes with this platform. Their availability on Google Play and Apple App Stores is icing on the cake. The most unique part of this platform is the way it distils and curates the critical elements of open-source intelligence. They also make it a point to research on a continuous basis by analyzing other forums, platforms and market places. This way, they come up with an integrated solution that is more comprehensive. The AI-powered engines of ZFOX are patented and are capable of any automation as per requirement. They can also perform analysis-at-scale in a number of prominent fields. Their use of AI-powered design has given them the freedom to use their security components separately or together, depending on the cyber threats they face. The technology adapted by ZFOX is such that it is much more user-friendly, customer-centric, and easy to maintain too. It can be configured easily and quickly. Moreover, it is very time-and cost-effective. What is more, there is a round-the-clock OnWatch-managed security system ready to help the customers at any time. These teams are spread out in many places around the world and offer their clients a "follow the sun" operational experience. Combination with IDX has meaningful synergies ZFOX's integration with IDX adds significant, tangible strategic benefits to the combined value proposition for their customers. In many cases, IDX customers do not have sufficient external cybersecurity solutions for their internet-accessible attack surfaces. This creates space for the integrated company to introduce IDX to its customers to experience the ZFOX AI-powered protection platform and enhance their cybersecurity. Likewise, due to its combination with IDX, ZFOX is now capable of providing enhanced protection to its enterprise customers, thereby expanding its value proposition. This combination is widely appreciated as it not only benefits both the companies, but their customers as well.
Seeking Alpha • Sep 30

ZeroFox: Not All SPACs Are Bad

Summary ZeroFox has traded down after closing the SPAC deal in August. The cybersecurity firm just lowered FY23 estimates, but the company still has solid fundamentals. The stock has an appealing valuation at $6, but investors should stay on the sidelines until more complete financial information is provided. The ZeroFox Holdings (ZFOX) SPAC deal with L&F Acquisition Corp. just closed in August and the stock is already trading far below $10. Not all SPAC deals are horrible, with ZeroFox having a solid business model in the cybersecurity space. My investment thesis is Neutral on the stock trading at a large discount to the $10 SPAC price, but the company needs to better explain updated FY23 estimates. Source: FinViz Enterprise Cybersecurity SaaS ZeroFox is a leader in the enterprise cybersecurity space. The company focuses on external threat protection and response capabilities to protect enterprises against the entire lifecycle of external cyberattacks. All enterprises are in the midst of digital transformations, but the moves expose companies to external security threats. Everything is in the cloud and accessible via mobile along with social media and remote work leading to a business operating far beyond the traditional corporate walls. ZeroFox uses computer vision and machine learning powered by 20 AI patents to attack the problem at its source. All of the digital platforms from social media to e-commerce and digital currencies are used to transmit malicious payloads. The company has a blue-chip customer base and forecasted 2022 revenues reaching $150 million and jumping to $195 million in 2023. ZeroFox has a strong retention rate and over 90% of revenues are part of the recurring SaaS model. Source: ZeroFox SPAC presentation As with any cybersecurity firm, ZeroFox is projected for gross margins to reach 70% with strong cash flows down the road. The company remains relatively small, but at least the goal is to generally be cash flow neutral at the start of public life, with a strong cash balance of $270 million. Along with an SEC filing, ZeroFox lowered the 2H'23 revenue target to a range of $82 million to $86 million. The company blames the timing of investments in growth due to a delay in completing the SPAC deal and the macro environment. Deal Price Break ZeroFox had an initial equity value of $1.3 billion based on 139 million shares outstanding. The EV was closer to only $1.0 billion, and of course, these amounts are before including the ~16 million warrants exercisable at $11.50 per share (far out of the money now). Source: ZeroFox SPAC presentation The stock traded above $10 when the deal closed, but ZeroFox quickly plunged below $5. The stock has rebounded slightly now, but the new price has the stock only worth $850 million for an EV/S multiple of just 3x now. Unfortunately, a lot of the public cybersecurity stocks used by L&F Acquisition in the SPAC presentation of peer stocks fall into similar valuations after the large sell-offs. Okta (OKTA), Rapid7 (RPD) and Tenable Holdings (TENB) have all fallen to around the 4x forward EV/S multiples. Data by YCharts As a newly public company and part of a SPAC deal, the market definitely isn't going to pay a premium for ZeroFox. The good news though is that these stocks all provide solid values from historical multiples where 10x forward sales were appealing. Since ZeroFox just completed the deal in early August and is newly public, investors are sometimes wise to watch the company from the sidelines. The going public process can cause management teams to lose focus and disrupt operations.

Shareholder Returns

ZFOXUS SoftwareUS Market
7D0%-6.8%-2.9%
1Y39.9%-9.3%23.5%

Return vs Industry: ZFOX exceeded the US Software industry which returned 35.2% over the past year.

Return vs Market: ZFOX exceeded the US Market which returned 25.7% over the past year.

Price Volatility

Is ZFOX's price volatile compared to industry and market?
ZFOX volatility
ZFOX Average Weekly Movement1.3%
Software Industry Average Movement10.1%
Market Average Movement7.2%
10% most volatile stocks in US Market16.6%
10% least volatile stocks in US Market3.1%

Stable Share Price: ZFOX has not had significant price volatility in the past 3 months.

Volatility Over Time: ZFOX's weekly volatility has decreased from 9% to 1% over the past year.

About the Company

FoundedEmployeesCEOWebsite
2013914Jim Fosterwww.zerofox.com

ZeroFox Holdings, Inc. engages in the provision of software-as-a-service-based external cybersecurity solutions that focuses on exposing, disrupting, and responding to threats outside the traditional corporate perimeter. The company offers ZeroFox Protection provides real-time asset and vulnerability awareness of external-facing internet accessible digital footprint and enables organizations to configure protective capabilities to continuously protect external assets; ZeroFox Intelligence provides threat intelligence solutions that enable customers to directly search across company’s data lake of global threat indicators, tactics, adversary intelligence, exploits, and vulnerabilities; ZeroFox Disruption leverages company’s platform to report, block, and take down an attack’s core components across the internet; and ZeroFox Response enables organizations to provide the required 24x7 level of support necessary to quickly respond to cyber incidents including external attacks, data loss or exfiltration, ransomware, and potential breaches. It serves customers in various industry verticals, such as education, energy, entertainment, financial services, government healthcare, media, retail, services, and technology.

ZeroFox Holdings, Inc. Fundamentals Summary

How do ZeroFox Holdings's earnings and revenue compare to its market cap?
ZFOX fundamental statistics
Market capUS$142.32m
Earnings (TTM)-US$356.31m
Revenue (TTM)US$233.30m
0.6x
P/S Ratio
-0.4x
P/E Ratio

Is ZFOX overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
ZFOX income statement (TTM)
RevenueUS$233.30m
Cost of RevenueUS$158.34m
Gross ProfitUS$74.96m
Other ExpensesUS$431.27m
Earnings-US$356.31m

Last Reported Earnings

Jan 31, 2024

Next Earnings Date

n/a

Earnings per share (EPS)-2.85
Gross Margin32.13%
Net Profit Margin-152.73%
Debt/Equity Ratio136.1%

How did ZFOX perform over the long term?

See historical performance and comparison

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/05/14 07:07
End of Day Share Price 2024/05/10 00:00
Earnings2024/01/31
Annual Earnings2024/01/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

ZeroFox Holdings, Inc. is covered by 3 analysts. 3 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Jonathan RuykhaverCantor Fitzgerald & Co.
Joseph GalloJefferies LLC
Brad RebackStifel, Equities Research