Security_Design_Vertical SaaS_ 4 Ideas, 5 Themes, 20 Predictions for 2025

Summary of Key Points from the Conference Call Industry Overview - The report provides an outlook for the security, design, and vertical-specific software sectors for 2025, highlighting key companies and trends [1][2]. Companies Highlighted - Adobe Inc. (ADBE): Target price revised to $567, with a focus on its potential in GenAI adoption and expected 12-15% EPS compounding [3][18]. - Autodesk, Inc. (ADSK): Target price set at $355, with expectations of cyclical improvement and cost reduction leading to higher free cash flow per share [3][18]. - nCino, Inc. (NCNO): Upgraded to Overweight (OW) due to a favorable banking backdrop and competitive landscape [3][7]. - Varonis Systems, Inc. (VRNS): Target price adjusted to $60, with expectations of revenue and margin improvements as it transitions to SaaS [3][18]. Core Themes 1. Security Spending: Expected to remain robust, with a projected growth of 13% [4]. 2. Vertical SaaS: Anticipated to improve fundamentals in 2025, despite lagging behind broader software trends [4][7]. 3. Cyclical Design Stocks: These are expected to benefit from recovery in the EMEA region, potentially driving earnings estimates higher [4]. 4. Bundled Pricing in Cybersecurity: More companies are expected to adopt bundled pricing strategies, enhancing product adoption [4][7]. 5. Impact of Lower Interest Rates: Lower rates may affect several companies, particularly those with high leverage or cash reserves [4][7]. Predictions for 2025 - ADBE: Expected to disclose Firefly ARR at the analyst day in March [7]. - CYBR: Anticipated to raise long-term free cash flow targets [7]. - PANW: Expected to see increased contributions from its platformization strategy [7]. - VRNS: Projected to discuss FY25 as the trough year in its SaaS transition, with potential revenue and margin acceleration in FY26 [7]. Financial Metrics and Changes - ADBE: Revenue forecast for 2025 is $23.425 billion, with an adjusted EPS of $20.35 [17]. - CYBR: Revenue expected to grow to $1.292 billion in 2025, with an adjusted EPS of $3.46 [23]. - FTNT: Revenue projected at $6.601 billion in 2025, with an adjusted EPS of $2.44 [30]. - VRNS: Revenue expected to reach $975 million by FY27, with a target price of $60 [3][18]. Additional Insights - The report emphasizes the importance of GenAI in driving engagement and retention for companies like ADBE [18]. - The cyclical nature of design stocks and their exposure to EMEA markets could lead to significant upside in earnings estimates as recovery progresses [4][7]. - The transition to SaaS for companies like VRNS is seen as a critical factor for future growth and margin improvement [3][18]. This summary encapsulates the key insights and predictions for the security, design, and vertical SaaS industries as discussed in the conference call, providing a comprehensive overview of the expected trends and financial metrics for the highlighted companies.