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CYRN Stock – Cybersecurity Play With Potential

With 1.3 billion users worldwide, Cyren Ltd. (NASDAQ: CYRN) provides its users the fastest protection from cyberattacks by utilizing cloud intelligence. CYRN stock has been trending lately after the company sold its Secure Email Gateway business – triggering a 49% run. With this in mind, cybersecurity companies including CYRN are becoming more appealing to investors due to the rising fear of cyberattacks. In light of this rising demand and the company’s quality products, CYRN stock is shaping to be one of the most promising stocks this year.

CYRN Stock News

As the threat of cyberattacks continue to rise, demand for effective and fast cybersecurity solutions has been climbing as well. For this reason, the Senate recently passed “The Strengthening American Cybersecurity Act” which requires civilian federal agencies and infrastructure owners to report cyberattacks within 72 hours of the attack. Infrastructure companies will also be required to report ransomware payments within 24 hours to the federal government. 

All reports will go directly to the Cybersecurity and Infrastructure Security Agency making it a funding priority which is why Congress included $2.6 billion in funding for the Cybersecurity and Infrastructure Security Agency in its budget. This $500 million increase from last year has directed many investors’ attention to cybersecurity companies like CYRN which could potentially benefit from the renewed focus on cybersecurity.

With top notch products and solutions, CYRN is in a prime position to capitalize on this demand through its line of products. Already the company has attracted 1.3 billion users thanks to its ability to catch phishing attacks and automatically remediate these attacks before they hit. This is mainly done through its Inbox Detection and Response (IDR) solution – Cyren Inbox Security.

This service is 100% cloud-based and its 24/7 email threat response service notably reduces the time which companies’ IT or security teams spend investigating. Using Inbox Security for Office 365, CYRN provides enterprises with tools to identify and protect them from evasive threats. Because cyberattacks are improving constantly, these attacks can fool employees who have been trained to catch them. This is why Cyren Inbox Security provides a critical layer of security for the user’s mailbox and automatically deals with them through continuous monitoring of all emails, scanning and real-time analysis of URLs and web pages, and ongoing analysis of email sender and recipient behavior. Overall, it is able to outperform Secure Email Gateways which conduct only a single pass of the data.

According to the company, through this service, CYRN deals with 25 billion security transactions and blocks 300 million threats daily. This means it identifies 9 new threats and blocks over 3,000 known threats each second using Office 365’s API integration to detect email threats so that its automated remediation tools can quickly mitigate malicious attacks.

When an attack happens, CYRN offers another product through its Incident Response Service which is able to remediate these attacks using the company’s proven playbook. This service investigates the incident and combines similar incidents into one single case to reduce alert fatigue.

One aspect of this high success rate is CYRN’s Threat Indepth product which surpasses other vendors because they rely on threat intelligence feeds which purchase data from similar sources – leaving valuable information to become buried in the data pile. To combat this, CYRN uses unique, actionable threat intelligence gathered by continuously analyzing and processing billions of emails, files, and web traffic to identify attacks before they happen. As a result, the company has a competitive advantage in the cybersecurity industry which has made many investors see its potential following a string of major cyberattacks on companies like NVIDIA, Belgian oil facilities, and even governments.

A recent cyber-attack on Israel took down a number of government websites including the Prime Minister’s. Following the attack, the government issued a declaration of a state of emergency to review the damage – illustrating the importance of efficient cybersecurity systems like CYRN’s.

As is, investors are eagerly awaiting CYRN’s annual report which is due to be released on March 24th. Considering its 1.3 billion users, the company could potentially report significant financial growth – especially in revenues.  During its Q3 earnings call, the company’s CEO – Brett Jackson – highlighted Cyren’s unique approach which leverages the company’s core strength in automated, real-time phishing and business e-mail compromise detection as well as automated incident response.

However, the company reported that GAAP revenue for Q3 was $7.5 million – a YOY decrease from $9.1 million in Q3 of 2020. This drop was largely a result of a contract reduction by one of CYRN’s largest customers and lower values of customer renewals. Operating expenses decreased 7% for Q3 – totaling $9 million for the quarter. Net loss was $5.8 million compared to $4.9 million during Q3 of 2020.

On that note, the company shared that Cyren Inbox Security was released during Q2 of 2020 and although the number of contracts signed each quarter continues to increase – the ratable nature of its revenues means that the revenue contributed during the quarter was not material. But CYRN’S management remained optimistic saying that it will take a number of quarters before the revenues from Cyren Inbox Security will begin to have a meaningful impact on the company’s revenue.

In order to boost liquidity, CYRN announced the closing of its securities purchase agreement which raised $12 million. CYRN intends to use the proceeds for working capital, which could help offset the costs CYRN experienced last quarter.

Overall, CYRN stock has the potential to continue its run given the high demand for cybersecurity products. If the company shows growth in its annual report, this could signal a turnaround for the company’s financials. In the long-term, CYRN will likely benefit from its fast and efficient products – especially its newly introduced Cyren Inbox Security – which could put the company in a good position to capitalize on rising demand for cybersecurity products.

*Updated June 8th

Aiming to continue growing in the cybersecurity sphere, CYRN agreed to divest its Secure Email Gateway business to Content Service Group for €10 million in cash. This divestment will allow CYRN to focus on pursuing growth opportunities to deliver value to its shareholders and customers. With this in mind, Jackson believes “the divestment will enable Cyren to focus on its best strategic growth opportunities to deliver optimal value to its customers and shareholders”. In this way, CYRN intends to use the proceeds from this divestment to further develop its Threat Intelligence Services and its Inbox Security anti-phishing solution which have been receiving more demand recently. Moreover, these proceeds are expected to boost CYRN’s balance sheet – allowing the company to further develop its services.

CYRN Stock Financials

According to its latest quarterly report, CYRN’s revenues declined to $7.2 million compared to $8.7 million in Q1 2021. Meanwhile, operating costs increased from $9 million to $9.8 million – leading to CYRN’s net loss climbing from $4.1 million a year ago to $6.5 million. However, the company’s balance sheet was encouraging as CYRN increased its cash on hand from $4.3 million in Q4 to $17.6 million. As a result, CYRN reported $58.2 million in assets compared to $46.1 million in the previous quarter. With $23 million in liabilities, CYRN appears to be in a strong financial position and its finances will only be strengthened by the company’s recent divestment.

Media Sentiment

@RealtorStarShar is a long-term believer in CYRN stock’s potential.

@greatstockpicks added CYRN stock on the news of the divestment.

Technical Analysis

CYRN stock is currently trading at $2.38 and has supports near 2.26, 1.88, and 1.63. It also shows resistances near 2.41 and 2.67. Following the company’s sale of its Secure Email Gateway business, CYRN stock climbed 49% thanks to investors bullish on this divestment. However, CYRN stock could be set for a drop to fill the gap near $1.8. With this in mind, CYRN has a strong support near $1.63 which could be an entry point for bullish investors.

While the MACD is bullish to the upside, accumulation is on a steep downward trend. However, the RSI picked up from 45 to 77 indicating that CYRN stock is overbought. In light of these indicators, CYRN stock could witness a drop back to its $1.63 support if it fills the gap. As for its share structure, CYRN has an OS of 7.7 million and a low float of 5 million.

CYRN Stock Forecast

With high quality products and an impressive list of partners, CYRN is proving to be a leader in the cybersecurity industry. Given the high demand for cybersecurity products, CYRN is well-positioned to capitalize on the growing demand as it continues to introduce effective products. Considering the company’s recent divestment, CYRN is in a prime position to develop its Threat Intelligence Services and Inbox Security solution to meet the rising demand for these services. In addition, the proceeds from the sale of its business could help the company pursue growth opportunities in the cybersecurity sector. With an extremely low float, any catalyst could send CYRN stock running.

If you have questions about CYRN stock and where it could be heading next feel free to reach out to us in our free alerts room!


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