Equifax Breach to Lift Three Stocks

Sept. 12, 2017 3:41 p.m. ET

Piper Jaffray

After the market close Thursday,


Equifax



EFX 2.510608203677511%



Equifax Inc.


U.S.: NYSE


USD115.96


2.84
2.510608203677511%



/Date(1505250035941-0500)/


Volume (Delayed 15m)
:
6896287



AFTER HOURS



USD116.15


0.190000000000012
0.1638496033114867%


Volume (Delayed 15m)
:
41949




P/E Ratio
24.56779661016949

Market Cap
13616594214.8917


Dividend Yield
1.345291479820628%

Rev. per Employee
346747









More quote details and news »


announced a cybersecurity breach that could impact 143 million U.S. consumers, which equates to roughly 44% of the U.S. population.

The market is responding positively for cyber-security names, including


Symantec



SYMC 2.9923664122137406%



Symantec Corp.


U.S.: Nasdaq


USD33.73


0.98
2.9923664122137406%



/Date(1505250000269-0500)/


Volume (Delayed 15m)
:
9529386



AFTER HOURS



USD33.95


0.220000000000006
0.6522383634746517%


Volume (Delayed 15m)
:
410000




P/E Ratio
N/A

Market Cap
20126184280.3955


Dividend Yield
0.8894159501927068%

Rev. per Employee
331538









More quote details and news »


(ticker: SYMC), which should see a benefit to its LifeLock business.


FireEye’s



FEYE 0.6093845216331505%



FireEye Inc.


U.S.: Nasdaq


USD16.51


0.1
0.6093845216331505%



/Date(1505250000428-0500)/


Volume (Delayed 15m)
:
5352706



AFTER HOURS



USD16.5


-0.0100000000000016
-0.06056935190793458%


Volume (Delayed 15m)
:
54791




P/E Ratio
N/A

Market Cap
2989376840.18433


Dividend Yield
N/A

Rev. per Employee
251833









More quote details and news »


(FEYE) Mandiant has also been reported to have been contracted to investigate the breach. We believe mega-breaches like Equifax (EFX) not only create awareness for the security space, but typically result in an increase in spending by enterprises. Our top picks remain


Proofpoint



PFPT -1.2501370764338195%



Proofpoint Inc.


U.S.: Nasdaq


USD90.05


-1.14
-1.2501370764338195%



/Date(1505250000212-0500)/


Volume (Delayed 15m)
:
543758



AFTER HOURS



USD90.05



%


Volume (Delayed 15m)
:
1801




P/E Ratio
N/A

Market Cap
4051115788.88702


Dividend Yield
N/A

Rev. per Employee
281099









More quote details and news »


(PFPT) and Symantec.

Equifax’s breach occurred between mid-May and July. Customers’ names, Social Security numbers, birth dates, addresses and driver’s license numbers were stolen from the database, with an estimated 209,000 stolen credit-card numbers as well.

This breach is different than many of the other megabreaches we have seen. According to Mark Lanterman, a cyber-security expert and chief executive of Computer Forensic Services, the data stolen in this breach has no shelf life. Unlike credit-card numbers which can be easily cancelled, personal information such as SSN, birth dates, etc. do not change and can be sold and exploited for years. Mr. Lanterman said the data stolen in this breach are already being sold on the dark web for upwards of $1,000, whereas credit-card data typically only fetches $5-$25 per card number.

We believe the Equifax breach brings into question the credibility of using the Equifax credit-monitoring services over other competing services such as LifeLock. With pricing that is largely in line with LifeLock, we believe the breach will result in significant market-share losses going forward for Equifax.

Equifax offers a number of credit monitoring and identity-theft protection services, similar to Symantec’s LifeLock. Equifax’s solutions were launched in 2008, which include ID Patrol for $16.95 a month and ID Patrol Premier for $19.95 a month. The two services are similarly priced to LifeLock, which currently sells the Standard plan for $9.99 a month, Advantage for $19.99 a month and Ultimate Plus for $29.99 a month. The LifeLock plans not only include real-time credit monitoring, but also provide liability compensation and other services.

As is the case with most major breaches, it is being reported that FireEye’s Mandiant incident response team has been contracted to investigate and clean up the breach (according to ZDNET). This should be a positive for FireEye, as incident-response engagement typically results in product sales afterward.

According to Mark Lanterman, he believes the Equifax breach likely started via an email containing a malicious link or attachment. This is consistent with what Proofpoint said last week at their Analyst Day, where 90%-plus of sophisticated attacks target people, largely via email. Proofpoint is one of the only email-security solutions that can detect malicious links and attachments.

— Andrew J. Nowinski
— James E. Fish

The opinions contained in Investors’ Soapbox in no way represent those of Barrons.com or Dow Jones & Company, Inc. The opinions expressed are those of the newsletter’s writer(s) or analysts at research firms. Some of the research firms have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

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