SolarWinds(Nasdaq: SWI), an Oklahoma-based American IT company that develops software for businesses to help manage their networks, systems, and information technology infrastructure was subject to a cyberattack last week and this has seen its share price plummet rapidly over the past week.
It is suspected that Russian hackers may be behind the cyberattack that has entrapped SolarWinds in this controversy. However, in a Facebook post, The Embassy of Russia in the USA has denied these allegations and state that this is another “unfounded attempt of the U.S. media to blame Russia for hacker attacks on U.S. governmental bodies”.
SolarWinds has several high-profile customers ranging from Fortune 500 customers to government bodies and it is suspected that all their data too may be at risk as evidenced by Microsoft’s data breach, early this week, linked to the same.
SolarWinds’ share price impact
The company was listed on the Nasdaq in late 2018, at $15.44 and had a successful run until this cyberattack. Since the cyberattack on SolarWinds, the share price has toppled by more than 30% to close at $16.01 on 23rd December. The share had opened at $15.97, before falling to $15.21 and shooting up to $16.16 before settling at $16.01.
On the technical front, the share has formed a Doji candlestick indicating indecisiveness in the share. The hourly, daily, weekly, and monthly charts indicate bearishness in the share. On a daily basis, the MACD, RSI, and Stochastic indicators all are flashing sell signals. There is also high volatility in this stock due to the strong negative news flowing through.
On the fundamental front, the basics seem to be good. The revenue has more than doubled since 2016, from $469m to more than $1b as of December 2020. The gross margin comes in at a strong 73.11% and the net profit at 3.15%. The balance sheet has been steady and has not seen much growth over the years. As of October 2020, the EPS is 0.28 and has shown a strong upward trajectory growing by at least 10% QoQ.
The stock looks good on a fundamental basis and is bound to give strong returns in the year ahead. Though, an investor who has held the stock since its listing would hardly have made any gains, though this share could shoot up at any moment.