Darktrace is increasingly more competitive, says Jefferies


Darktrace PLC (LSE:DARK) is building a “deeper competitive moat” that should help future churn and net retention metrics, according to analysts at Jefferies.

The cybersecurity group held an investor event, co-hosted by the US investment bank, where management expressed confidence in the underlying technology.

READ: Darktrace shares do not reflect significant uncertainty in new area of cybersecurity market – broker

Darktrace uses unsupervised machine learning and AI to detect abnormal behaviour and potential risks.

By learning a company’s existing corporate landscape, rather than focusing on known threats/signatures, Darktrace can identify all types of risks, including zeroday attacks that have not been seen before.

The FTSE 100 group has developed ten products though 60% of customers are using three.

“The next phase of product development is strategically significant and takes the company from the existing markets of ‘detect’ and ‘respond’ into new areas of ‘prevent’ and ‘heal’. This creates a closed loop with a self-learning, self-healing network that can dynamically adapt with each component feeding and improving the next,” analysts said.

“This turns Darktrace into more of a platform-based company, with enhanced abilities to cross-sell products and build deeper tentacles into their customers.”

“This differentiated approach is further enhanced through Darktrace’s breadth of capability and Darktrace can to connect to the full spectrum of corporate networks from email, to SaaS and cloud applications to industrial landscapes,” the broker added.

Shares dropped 5% to 599.17p on Wednesday afternoon.


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