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   Technology StocksSonicwall Inc. - SNWL

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To: caly who wrote (52)6/6/2001 8:54:41 AM
From: caly
   of 63
Wednesday June 6, 8:05 am Eastern Time

Press Release


SonicWALL Signs OEM Agreement With Cisco Systems

Cisco to Offer SonicWALL SSL Technology as Part of Its Content Delivery Solutions

SUNNYVALE, Calif., June 6 /PRNewswire/ -- SonicWALL, Inc. (Nasdaq: SNWL - news), a leading provider of Internet security solutions, today announced it has signed an Original Equipment Manufacturer (OEM) agreement to provide its Secure Sockets Layer (SSL) acceleration products to Cisco Systems (Nasdaq: CSCO - news). Under the terms of the agreement, SonicWALL will supply SSL acceleration appliances that complement Cisco's content delivery solutions targeted at large enterprise data centers, web server farms and application service providers. The Cisco-branded SSL products will begin shipping in Q3 2001.

SonicWALL's unique SSL acceleration and offloading technology completely removes the burden of encryption and decryption processing from secure Web servers, boosting site performance and increasing network efficiency for e-commerce and other secure applications. SSL offloading allows Web sites to offer privacy and security to their clients and employees without compromising the performance of the Web servers. SonicWALL's SSL products allow Cisco's content switches to intelligently load balance encrypted Internet traffic enabling maximum availability and performance in the most demanding network environments. With the ability to act on decrypted, layer 7 data, secure content switching offers greatly enhanced performance for large e-commerce sites and other secure e-business applications.

``We are delighted that Cisco has chosen SonicWALL SSL products to enable enterprises to increase the performance and security of their content delivery networking infrastructure,'' said Sreekanth Ravi, President and Chief Executive Officer of SonicWALL. ``With the continued rapid growth in secure Internet traffic worldwide, and Cisco's position as the worldwide leader in Internet infrastructure products, SonicWALL's SSL products are a natural complement to delivering high-performance e-business solutions to Cisco customers.''

About SonicWALL, Inc.

SonicWALL, Inc. is the leading provider of integrated Internet security appliances offering access security, transaction security and security services for the enterprise, e-commerce, SME, education and government markets. Core technologies include firewall, VPN, SSL, high availability, anti-virus, strong authentication with digital certificates, vulnerability assessment and content filtering. Together, these products and technologies provide the most comprehensive Distributed Security Architecture available. SonicWALL, Inc. is headquartered in Sunnyvale, CA. SonicWALL trades on the NASDAQ exchange under the symbol SNWL. For more information, contact SonicWALL at 408-745-9600 or visit the company Web site at

Certain statements in this press release are ``forward-looking statements'' within the meaning of the Securities Act of 1933, as amended. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect SonicWALL's actual results include, but are not limited to, the ``Risk Factors'' described in our Securities and Exchange Commission filings, including our Prospectus dated March 16, 2000. All forward-looking statements included in this release are based upon information available to SonicWALL as of the date of the release, and we assume no obligation to update any such forward-looking statement.

NOTE: SonicWALL is a registered trademark of SonicWALL, Inc. Other product and company names mentioned herein may be trademarks and/or registered trademarks of their respective companies.


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To: caly who wrote (53)6/21/2001 10:25:14 PM
From: D. K. G.
   of 63
AFGC Profiles: SonicWALL

Research Analyst: Will Frankenhoff (6/21/01)

The advent of the Internet has brought many benefits to corporate America - improved operating efficiencies, enhanced customer support, and easier access to global markets, among others. At the same time, the 'Net has also increased corporate exposure to unwanted intrusions, be they malicious viruses or hacking attacks.

Take the hacker attacks experienced by Microsoft (NASDAQ: MSFT - Quotes, News, Boards) and eBay (NASDAQ: EBAY - Quotes, News, Boards) earlier this year or the infamous "ILOVEYOU" and "Melissa" viruses that swept the globe. It is clear that the need for effective information technology (IT) security has never been greater.

Indeed, a recent ISCA study found that companies reported an average of 9 viruses per 100 computers, a fact that led the International Data Corporation (IDC) to project sales of anti-virus products alone would climb from $1.2 billion in 1999 to more than $2.7 billion in 2004.

Similarly, the hacker attacks on various corporate sites pose a serious threat to the smooth functioning of the B2B e-commerce market, a market that eMarketer projects will grow from $225 billion in 2000 to $2.8 trillion in 2004.

While there are a number of well-known IT security companies - Check Point Software Technologies (NASDAQ: CHKP - Quotes, News, Boards), VeriSign (NASDAQ: VRSN - Quotes, News, Boards) and Internet Security Systems (NASDAQ: ISSX - Quotes, News, Boards) come to mind - one often overlooked company is SonicWALL (NASDAQ: SNWL - Quotes, News, Boards), the leading player in the small-medium enterprise (SME) markets that also targets the Virtual Private Network (VPN) market and the educational market.

SonicWALL dominates the SME market with an installed base of more than 140,000 appliances (up 20% sequentially) worldwide as of March 31, 3001, more than double that of its closest competitor Watchguard Technologies (NASDAQ: WGRD - Quotes, News, Boards).

The importance of this domination cannot be overstated for two reasons: First, this market is under-penetrated, boasting a mere 5% saturation level versus the 40%-45% saturation rate of the large enterprise market; and second, given the lack of penetration and the growing amount of small businesses accessing the Internet, demand for security products in this market will grow at a much faster rate than the overall Internet security market.

According to IDC estimates, the number of small businesses (fewer than 100 people) accessing the Internet is projected to increase from 50% in 1998 to more than 65% in 2001, for a total of 4.7 million businesses. SonicWALL offers the only ISCA-certified firewall for under $1,000, a not insignificant factor to these cash-strapped business. IDC projects that firewalls costing less than $5,000 will grow at a compound annual growth rate (CAGR) of 81% from $32.7 million in 1998 to approximately $635.4 million at the end of 2003. The overall IT security market is projected to grow at a 21% CAGR over the same period.
In a similar vein, SonicWALL's focus on the VPN market also is paying dividends. These networks, which support 1-1,000 users and can link branch offices of large corporations or be used in medium-size companies as an intranet, are projected by Infonetics Research to grow 100% annually at least through 2002. This is primarily because these networks cut telecommunications costs for internal communications by nearly 90%.

That SonicWALL has positioned itself extremely well is evident by examining its results since going public back in November of 1999. In each of the six quarters since that time, SonicWALL has grown revenue by an average 277%, had a profit in each quarter, and has amassed an average earnings growth rate of 205% over the past three quarters, excluding one-time items.

After racking up $69.4 million in sales in 2000 (up 230% over 1999), analysts are expecting revenue to come in at approximately $114 million in fiscal 2001 and $175 million in 2002, representing growth of 65% and 53%, respectively. Keep in mind that these numbers have been already been revised downwards to account for the slowdown in the industry.

Earnings are expected to remain relatively flat in 2001 at $0.35 per share due to current market conditions as well as the impact of the Phobos acquisition. But share profits are projected to climb to $0.59 in 2002, representing 68% growth.

We believe that these estimates could prove extremely conservative given the recent OEM agreement reached with Cisco (NASDAQ: CSCO - Quotes, News, Boards) , in which Cisco announced it would buy SonicWALL's Secure Sockets Layer (SSL) solution and brand it as its own (i.e. Cisco will buy the product, slap its own label on it and resell it as its own). Given Cisco's well-known distribution capabilities, we believe that upside from this product could be as great as 20% in revenue and 10% to 15% in earnings during the second half of 2001. Shipments of the products are scheduled to commence in the third quarter.

Bottom Line:

Shares of SonicWALL currently trade at around 28 times fiscal 2002 estimates of $0.59 per share, a 43% discount to the company's projected revenue growth rate and a whopping 59% discount to earnings growth. In time, we expect this stock to trade at a premium to its growth rate, as shares of VeriSign and Checkpoint do today. We rate the stock a "buy" at current levels.

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To: D. K. G. who wrote (54)7/20/2001 6:46:00 PM
From: D. K. G.
   of 63
In Play® 8:54AM SonicWALL (SNWL) 21.19: Thomas Weisel Partners upgrades to STRONG BUY from Buy; citing growing dominance in low-end firewall market, improving visibility, and higher margin business from new ASP products.


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To: D. K. G. who wrote (55)12/18/2001 8:06:46 PM
From: D. K. G.
   of 63
SonicWall powers up

By Tim Greene
Network World VPNs Newsletter, 12/12/01

Sign up now to receive this newsletter in your inbox each week.

SonicWall is increasing the processing power of its VPN hardware at no extra charge, and in some cases the more powerful gear could cost less than its predecessor.

This is not the first time SonicWall has done this. About the same time last year the company upgraded the processors it builds into its VPN gateways, also without increasing prices.

Now the company is installing custom processors that will boost the VPN throughput of its low-end SOHO3 box to 20M bit/sec. Now that’s more speed than a SOHO office needs, but it is a byproduct of using the same powerful processor throughout its product line, all the way up to the PRO 300. And it never hurts to have more power than you need if it doesn’t drive up the price.

This is an encouraging sign. Lower prices for VPN gear only makes it more attractive and makes VPNs more accessible to more people. Those who are considering setting up VPNs can do so with some confidence that the industry will follow Moore’s law, which says that processing power continues to increase and prices continue to drop.

While announcing these performance gains, SonicWall also said it has plans to quickly make some of the RedCreek gear that it bought recently manageable by SonicWall’s management platform. Initially, this will include only gear that doesn’t overlap with SonicWall’s products, but could expand. The company is also offering more services that help users set up their VPNs.

Both of these developments should help the company as it tries to woo more enterprise customers. Part of the reason SonicWall bought RedCreek was for its customer list.

Clearly SonicWall is trying to evolve from a small-business VPN specialist to an enterprise-class VPN vendor, so you should note that when compiling a list of vendors to consider.

Tim Greene is a senior editor at Network World, covering virtual private networking gear, remote access, core switching and local phone companies. You can reach him at

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To: D. K. G. who wrote (56)3/26/2002 7:07:31 PM
From: D. K. G.
   of 63 3:16PM SonicWALL (SNWL) 13.47 +0.08: Shares are getting a small boost out of Pacific Crest intraday; names SNWL as "one of the undervalued plays in the firewall/VPN mkt;" believes that SNWL has one of the most defensible positions given its strong value proposition in the SME mkt and large base of VARs for distribution and sales efforts. Recent conversations with mgmt have revealed the co. is maintaining its focus in the SME market. Pac Crest rates current business fundamentals as "strong, even throughout the difficult IT environment." Shares trade at a discount to its growth rate.

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To: D. K. G. who wrote (57)4/4/2002 12:25:01 PM
From: Asymmetric
   of 63
Picked up SNWL Shares at $6.85

Anybody else buying here with SNWL at
new 52 wk low? Stock down 50% from only
last week, seems oversold to me.

Good luck to all. Peter.

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To: Asymmetric who wrote (58)4/4/2002 12:39:45 PM
From: caly
   of 63
Yes, I'm in at 6.70. Listened to both the Checkpoint and SonicWALL conference calls. Both citing delays in spending.

Even though they denied competition is an issue, competition in SNWL's low-end market is heating up. Could see price erosion. Still think this dip is a little overblown though. Time will tell.

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To: caly who wrote (59)4/5/2002 10:41:27 AM
From: Asymmetric
   of 63
Broker Reactions to SNWL

SonicWALL (SNWL / Nasdaq)
Deutsche Banc Alex Brown
Downgrading from Buy to Market Perform, with an $8 price target. Also cutting EPS estimates to $0.14 in fiscal 2002 and $0.22 for next year, to reflect the company's new guidance.

SonicWALL (SNWL / Nasdaq)
Lehman Bros
Cutting estimates and price target to $12 per share, after the company's warning. Maintain Buy rating, as the stock is trading for only 2 times cash.

SonicWALL (SNWL / Nasdaq)
Bear Stearns
We downgraded SNWL to an Attractive from a Buy due to the disappointing Q1 estimates and limited visibility for '02. SNWL announced yesterday that its revenues and EPS for Q1 fell short of our estimates. The co. expects to report sales of $28 to $29 million and EPS of $0.02 to $0.03. We had forecast $35 million and $0.09. Management indicated overall average pricing for the co.'s mid-tier line "PRO" line came down as customers traded down from the Pro 300 to the lower priced Pro 200 and SNWL issued more rebates on all products.

PS - just sold SNWL at 7.85 for $1 profits.
Didn't want to hold it over the weekend.

Good luck. Peter

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To: D. K. G. who started this subject6/14/2002 8:42:08 AM
From: pchristi12534
   of 63
Perkins, Wolf, McDonnell - advisors to the Berger Funds - just filed a report with the SEC indicating that they now own 7,673,470 of SNWL.

That's an increase of 7,249,480 shares over the 423,990 shares they owned as shown on their 2002Q1 F13 report.

They now own 11.5% of the total shares outstanding.

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To: D. K. G. who wrote (57)10/13/2003 4:40:00 PM
From: D. K. G.
   of 63
Lehman on SNWL

EPS (FY Dec)
2002 2003 2004 % Change
Actual Old New St. Est Old New St. Est 2003 2004
1Q 0.02 (0.03)A (0.03)A (0.03)A NA (0.03)E (0.01)E (250) 0
2Q 0.04 (0.06)A (0.06)A (0.06)A NA (0.02)E (0.01)E (250) 67
3Q 0.01 (0.05)E (0.05)E (0.05)E NA (0.01)E 0.00E (600) 80
4Q 0.00 (0.03)E (0.03)E (0.03)E NA 0.00E 0.01E NA NA
Year 0.06 (0.17)E (0.17)E (0.16)E (0.14)E (0.06)E (0.01)E (383) 65
Market Data Financial Summary
Market Cap 462.4M Revenue FY03 86.20
Shares Outstanding (Mil) 67.7 Five-Year EPS CAGR NA
Float 54 Return on Equity NA
Dividend Yield NA Current BVPS NA
Convertible No Debt To Capital NA
52 wk Range 7.31 - 1.83
Investment conclusion
! Concurrent with our sector upgrade, we are
upgrading shares of SonicWALL from 2-Equal
Weight to 1-Overweight and increasing price target
from $5 to $9.
! With an entirely new management team and product
refresh underway, we believe SonicWALL is in early
stages of turnaround which should gain speed in
2004. Recent product releases, including SOHO
TZW, and new Pro Series 3060 and 4060 released
in mid September, should be 4Q sales driver. We
believe we are likely to get further updates on
product roadmap at October 30th Analyst Day.
! Believe pricing beginning to stabilize suggesting
improved inventory levels which should alleviate
gross margin pressure. Channel checks point to
stable demand environment.
! Maintain FY03 estimates. For FY04, raising EPS
estimates from loss of $0.14 to loss of $0.06. Also
raising our topline slightly from $91.3 million to $95.0
(+10% y/y).
! Our $9 price target reflects an enterprise value of
3.9x C04.

Upgrading to 1-Overweight

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