Mimecast (MIME) is a small-cap cybersecurity play offering a platform for detecting, preventing, and solving the countless security threats to companies’ IT systems, explains Luke Downey, growth stock expert and editor of The Big Money Report

Mimecast focuses on security issues that come from emails. It might not sound sexy, but emails are the #1 source of security breaches for companies. Phishing, malware, and even spam are constant problems for big corporations. The company already has over 40,000 customers… and its security platforms handle more than 800 million emails each day.

Mimecast offers a range of services to help them discover incoming threats, protect their systems from anything that gets through… and even recover data after an attack. In recent years, it has rolled out additional products that create secure web and email gateways… giving companies an additional layer of protection from cyber threats.

Cybersecurity is a huge issue for companies. And Mimecast’s financial results show it’s establishing itself as a major player in the space. Over the past five years, the company has grown its annual revenue from $142 million to over $500 million. That’s an increase of over 250%. 

More importantly, Mimecast is still seeing huge growth. During its most recent quarter, revenue grew 24% year-over-year (YoY). It also added more than 600 new customers during the quarter, while increasing the sales it generated from existing customers by 5%.

With a market cap of under $5 billion, Mimecast is still small for a tech company. But it’s showing all the signs of a future giant. The company routinely “under-promises and over-delivers” — which means it consistently beats its own guidance.

For example, during its May 2021 earnings announcement, management said revenue would come in around $137–$138 million next quarter. When it announced results in August 2021, revenue ended up well over $142 million, easily beating its own estimates. 

In short, I see “seeds of greatness” in Mimecast. This is a small company that offers a hugely popular — and important—product to thousands of big businesses. And since software is a high-margin business, Mimecast is already profitable. It generated net income of just over $10 million last quarter.

Turning to the Big Money, the chart shows more than a dozen buy signals since May 2021. Put simply, institutional investors have started to notice Mimecast’s success and are jumping aboard.

Even better, Mimecast recently popped up on my Top Ranked Report — the strictest screen I run. In other words, this is one of the strongest stocks in the entire market in terms of fundamentals and Big Money buying.

When I look at Mimecast, I see a long runway for growth… that could easily make this stock triple for us in a year or two. Action to take: Buy Mimecast up to $71.

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