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                                <title>2 UK shares to buy today after excellent trading updates</title>
                <link>https://www.twelfthmagpie.com/2022/03/03/2-uk-shares-to-buy-today-after-excellent-trading-updates/</link>
                                <pubDate>Thu, 03 Mar 2022 10:43:35 +0000</pubDate>
                <dc:creator><![CDATA[Stuart Blair]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[darktrace shares]]></category>
		<category><![CDATA[Mondi share price]]></category>
		<category><![CDATA[uk shares to buy]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=269666</guid>
                                    <description><![CDATA[<p>UK shares are facing a lot of volatility at the moment due to the Russia-Ukraine conflict. After these trading updates, here are two to buy right now. </p>
<p>The post <a href="https://www.twelfthmagpie.com/2022/03/03/2-uk-shares-to-buy-today-after-excellent-trading-updates/">2 UK shares to buy today after excellent trading updates</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>Trading updates are always extremely useful when I am deciding whether to buy shares in a company. They give an up-to-date assessment of how the company is performing, as well as offering some forward guidance. Here are two UK firms that released their half-year and full-year trading updates today, showing several positive signs. I think now is the time to buy both companies.</p>
<h2>A cyber-security firm</h2>
<p><strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) has had a mixed start to life as a public company. After soaring to around 1,000p, the UK share has since dropped back to under 400p. But after today’s excellent trading update, and some other recent positive developments, the shares have managed to climb back to over 500p. I think they can continue to soar.</p>
<p>Even as a current shareholder, the trading update exceeded my expectations. In fact, revenues in the six months to 31 December 2021 reached over $192m, over a 50% year-on-year increase. Even more impressive was the fact that the company saw an operating profit of over $8m, mainly due to the pandemic-related suppression of some key costs. This is a change from the consistent losses the company has been seeing. While I don’t believe this is a sign of consistent profitability, especially as the costs are likely to return soon, it&#8217;s still a promising sign.</p>
<p>Even more promising is the updated forward guidance. For FY22, the company now expects year-on-year revenue growth of over 45%, updated from previous guidance of 43%. The recent acquisition of Cybersprint should also boost revenues in the longer term.</p>
<p>There are a couple of risks that must be pointed out though. For example, it has a high valuation, with a price-to-sales ratio of around 10. This implies that revenue growth is already expected to be very high. Further, share-based compensation is expected to increase over the next year, potentially leading to share dilution.</p>
<p>Despite these risks, the potential of Darktrace certainly seems too strong to ignore. This is a UK share I’ll continue to add to my portfolio.</p>
<h2>A packaging UK share</h2>
<p><strong>Mondi</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-mndi/">LSE: MNDI</a>) is a FTSE 100 share that has delivered consistent growth over the past few years, while also paying a sustainable, and fairly high, dividend. Its recent results also demonstrated its consistent growth.</p>
<p>For example, <a href="https://www.mondigroup.com/media/15098/mondi-group-full-year-results-announcement-2021.pdf">in 2021</a>, revenues were able to grow 16% year on year to €7.7bn, while operating profits grew 23% to over €1bn. This gives Mondi a price-to-earnings ratio of just 11. Considering that it’s managing to deliver strong growth, this seems very cheap. It also raised its full-year dividend 8%, reaching 65 cents. This equates to a yield of around 4%, far higher than many other UK shares.</p>
<p>Even so, the current conflict between Russia and Ukraine is a severe problem for Mondi, because it has significant operations in both countries. In fact, Russian revenues equate to around 12% of the group&#8217;s total. Loss of these revenues would, therefore, have a significant impact on the Mondi share price. As such &#8212; and also for the sake of an end to the suffering &#8212; I hope that a ceasefire is not too far away.</p>
<p>Despite this risk, Mondi is not a Russian company and will not be<a href="https://www.twelfthmagpie.com/2022/02/27/a-20-dividend-yield-is-this-ftse-100-stock-a-no-brainer-buy/"> targeted by western sanctions on Russia</a>. It should be able to mitigate the impacts of the conflict through its other operations. This is why it remains a stock I’m happy to have in my portfolio.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2022/03/03/2-uk-shares-to-buy-today-after-excellent-trading-updates/">2 UK shares to buy today after excellent trading updates</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Stuart Blair owns shares in Darktrace and Mondi. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>The Darktrace share price soars. Is this the start of a big recovery?</title>
                <link>https://www.twelfthmagpie.com/2022/01/11/the-darktrace-share-price-soars-is-this-the-start-of-a-big-recovery/</link>
                                <pubDate>Tue, 11 Jan 2022 10:39:28 +0000</pubDate>
                <dc:creator><![CDATA[Stuart Blair]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[darktrace shares]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=262134</guid>
                                    <description><![CDATA[<p>The Darktrace share price rose around 20% in early morning trading today, due to strong forecast revenue growth. Can it rise further? </p>
<p>The post <a href="https://www.twelfthmagpie.com/2022/01/11/the-darktrace-share-price-soars-is-this-the-start-of-a-big-recovery/">The Darktrace share price soars. Is this the start of a big recovery?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>The <strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) share price has sunk in recent months, falling from its highs of 950p to its current price of just under 500p. It&#8217;s still higher than its April debut price of 330p, and today, the shares have soared around 20% due to news of strong annual revenue growth and a guidance upgrade. So, is it now the perfect opportunity to invest in the shares or are they still too expensive?</p>
<h2>What has caused the recent decline?</h2>
<p>The company’s share price decline started at the end of October for a few main reasons. Firstly, Peel Hunt issued a broker note stating that, at over 900p, the shares were severely overpriced. It also described Darktrace’s product, which uses artificial intelligence to thwart cyber-attacks, as a <em>“gimmick”.</em> Peel Hunt gave Darktrace a price target of 473p. Of course, this is slightly above the current share price however, implying that after the recent drop, it may have upside potential.</p>
<p>Investors were also spooked by the number of investors who sold shares after the lock-up period (which prevents investors from selling shares until 180 days after the IPO) ended. This included major investors such as Deep Defence, which sold a third of its holdings, and Summit Partners and KKR. Such widespread selling led to investor confidence decreasing further.</p>
<p>As such, since the end of October, the shares have been on a downward spiral. Issues such as inflation and the <a href="https://www.twelfthmagpie.com/2021/12/06/the-nasdaq-just-fell-2-id-buy-these-2-tech-stocks-right-now/">general sell-off of technology stocks</a> have potentially contributed to this.</p>
<h2>What about the future?</h2>
<p>So far, much seems negative about Darktrace. But the company is still performing well. In fact, in its full-year 2021, the firm managed to increase revenues over 40% year-on-year to $281m. Adjusted EBITDA also reached nearly $30m, a 233% year-on-year rise. The company is still loss-making however, reporting a net loss of around $150m. This was mainly due to costs associated with the IPO.</p>
<p>Today also saw an announcement that revenue growth is expected to be around 43% for the next financial year, which is extremely positive. Indeed, this is up from previous estimations of around 38%. It would also take revenues up to well over $400m. This is a sign of excellent growth and a clear reason why the Darktrace share price soared around 20% in early morning trading. </p>
<p>In recent months, the company has also been able to attract more clients. This includes a lucrative deal with an unnamed European automotive giant and another deal with the building and civil engineering company, Sir Robert McAlpine. That firm said that Darktrace’s AI technology stops <a href="https://www.darktrace.com/en/press/2021/386/">around 18,000 email attacks each month</a>. This provides evidence that the technology is not just a <em>“gimmick”</em> and is a compelling reason for me to buy the shares.</p>
<h2>Can the Darktrace share price continue to rise?</h2>
<p>In the past, I’ve always avoided Darktrace due to its lofty valuation. But if it can achieve its forecast revenues for the next financial year, the Darktrace share price will have a forward price-to-sales ratio of under 10. While this is not bargain territory, it is certainly far more reasonable than before. As such, considering the excellent growth prospects of the firm, and the fact that cyber-security is a largely growing industry, I think today’s rise may just be the start of a major recovery. I’m very tempted to buy.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2022/01/11/the-darktrace-share-price-soars-is-this-the-start-of-a-big-recovery/">The Darktrace share price soars. Is this the start of a big recovery?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Stuart Blair has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>The Darktrace share price is down 30% in one month! Where&#8217;s it going in 2022?</title>
                <link>https://www.twelfthmagpie.com/2021/12/15/the-darktrace-share-price-is-down-over-30-in-one-month-wheres-it-going-in-2022/</link>
                                <pubDate>Wed, 15 Dec 2021 11:22:33 +0000</pubDate>
                <dc:creator><![CDATA[Paul Summers]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[cyber security]]></category>
		<category><![CDATA[Darktrace]]></category>
		<category><![CDATA[darktrace shares]]></category>
		<category><![CDATA[Deliveroo]]></category>
		<category><![CDATA[FTSE 100]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=259191</guid>
                                    <description><![CDATA[<p>The Darktrace plc (LON:DARK) share price has been walloped. Is it time for this Fool to begin building a position in this former market darling?</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/12/15/the-darktrace-share-price-is-down-over-30-in-one-month-wheres-it-going-in-2022/">The Darktrace share price is down 30% in one month! Where&#8217;s it going in 2022?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<img width="1200" height="675" src="https://www.twelfthmagpie.com/wp-content/uploads/2021/04/Share-price-fall1.jpg" class="attachment-rss-thumbnail size-rss-thumbnail wp-post-image" alt="Stack of British pound coins falling on list of share prices" style="float:left; margin:0 15px 15px 0;" decoding="async" fetchpriority="high" /><p>Back in August, I questioned whether the <strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) share price was <a href="https://www.twelfthmagpie.com/2021/08/20/is-the-darktrace-share-price-a-ticking-time-bomb/">a ticking time bomb</a>. Despite concluding that it probably wasn&#8217;t, I did suggest that it might let off some steam at some point. </p>
<p>In retrospect, it turns out that the former may have actually have been appropriate. The cybersecurity firm&#8217;s value has tumbled 30% in the last month alone.</p>
<p>Is it time for me to scratch that contrarian itch (as others seem to be doing today) or could there be more bad news to come? Let&#8217;s begin with a quick recap.</p>
<h2>The Darktrace share price: what gives?</h2>
<p>It was all going so well. Priced 250p a pop at its IPO, Darktrace stock went as high as 1,003p per share earlier this year. Towards the end of October, however, it all began to unravel.</p>
<p>The first capitulation occurred when analysts at Peel Hunt questioned whether the company was really worth its multi-billion pound valuation. Citing growing competition and Darktrace&#8217;s low R&amp;D spend, their target price was just 473p. </p>
<p>The downward pressure then continued as the post-IPO lock-up period came to an end and original investors jettisoned their holdings. Board members were also active sellers. Records show non-executive director Vanessa Colomar pocketed over £8m in November. That&#8217;s hardly encouraging.</p>
<p>From hitting that 52-week high, the Darktrace share price has now fallen 60%. So, where does it go from here?</p>
<div class="tmf-chart-singleseries" data-title="Darktrace Plc Price" data-ticker="LSE:DARK" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>

<h2>Where next?</h2>
<p>As always, no one knows for sure. So, let&#8217;s focus on a few positives first.</p>
<p>There&#8217;s little point arguing against the idea that cybersecurity will remain a major investment theme going forward. Assuming nothing truly awful happens, it seems likely that Darktrace&#8217;s self-learning AI will likely mop up a decent proportion of this business from multiple industries looking to protect themselves from bad actors operating online.</p>
<p>Regardless of share price antics, it&#8217;s also clear the firm is growing well. October&#8217;s Q1 trading update revealed a 50.8%<span class="bh"> increase in revenue (to $93.1m) compared to the previous year. </span><span class="ay">FY22 growth of between 37% and 39% is now expected. </span>Broker Berenberg remains a fan too, recently stating that &#8220;<em>any share price capitulation is a result of fear not fact</em>&#8220;.</p>
<p>On the flip side, one can argue that the valuation is <em>still</em> too high at a price-to-sales ratio of 13. While seemingly unrelated, the rise of Omicron could also push investors to sell what they can and batten down the hatches. Even if the general market sell-off doesn&#8217;t continue, Darktrace should be demoted from the FTSE 100 on December 20. </p>
<p>The situation isn&#8217;t helped by the Cambridge-based business having a very small free float (the number of shares available to buy and sell on the market). This could make any falls all the more dramatic because it takes less to budge the needle. Of course, big moves in the opposite direction can also occur, as evidenced by today&#8217;s 6% rise.</p>
<h2>Better opportunities</h2>
<p>Darktrace is in something of a dark place right now. While more positive on this company compared to fellow 2021 IPO stock <strong>Deliveroo</strong>, I can&#8217;t help but think that its similarly unprofitable status could haunt it going into 2022, especially in a market where traders are already nervous about the pandemic and the threat of <a href="https://www.bbc.co.uk/news/business-59663947">rising interest rates</a>. </p>
<p>In looking for compelling growth plays, the £2.6bn cap doesn&#8217;t make my shortlist just yet. </p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/12/15/the-darktrace-share-price-is-down-over-30-in-one-month-wheres-it-going-in-2022/">The Darktrace share price is down 30% in one month! Where&#8217;s it going in 2022?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Deliveroo Holdings Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>After its 12% rise, what’s next for the Darktrace share price?</title>
                <link>https://www.twelfthmagpie.com/2021/11/09/after-its-12-rise-whats-next-for-the-darktrace-share-price/</link>
                                <pubDate>Tue, 09 Nov 2021 07:12:47 +0000</pubDate>
                <dc:creator><![CDATA[Stuart Blair]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[darktrace shares]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=254251</guid>
                                    <description><![CDATA[<p>The Darktrace share price exploded 12% yesterday, mainly due to an analyst note rating the firm as a buy. Is this now the time for me to buy shares?</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/11/09/after-its-12-rise-whats-next-for-the-darktrace-share-price/">After its 12% rise, what’s next for the Darktrace share price?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>The <strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) share price has been extremely volatile recently, falling from highs of nearly 1,000p in September to its recent low of 580p at the end of last week. After yesterday’s 10% rise, the shares have managed to rebound to 650p. This is still around a 100% rise since its IPO in April. So, can this momentum continue and will the stock be able to reach its former highs?</p>
<h2>What caused the recent rise?</h2>
<p>There are a few factors that may have caused the Darktrace share price to rebound slightly yesterday. First, an analyst note from Berenberg stated that the recent share price plunge has been driven by <em>“fear not fact”.</em> This contradicted Peel Hunt’s negative broker note a fortnight ago, which stated that Darktrace shares were severely overpriced and that its product was a <em>“gimmick”.</em> As such, a more positive viewpoint on the company has clearly helped restore some investor confidence.</p>
<p>Furthermore, there has been evidence of some insider buying recently, as Chairman Gordon Hurst bought 25,000 shares at a premium last week. This shows that some insiders of the company are confident that the Darktrace share price is still too cheap and has room to rise further. This indicates that the recent share price dip may offer an excellent opportunity to buy some shares.</p>
<p>But not all investors share this confidence. Indeed, the lock-up period, which prevented certain shareholders from selling their shares for 180 days after its IPO, has recently ended, and multiple parties have sold. This included Deep Defence, a subsidiary of the private equity firm Vitruvian Partners, which sold a third of its holdings for around £70m. Other major investors, including Summit Partners and KKR, have also sold shares.</p>
<h2>Other factors</h2>
<p>One worry I have is that the company is valued too highly. The company is predicted to record fiscal 2022 revenues of around $382m. This places the cyber-security operator on a forward price-to-sales ratio of around 16, which is high in comparison to other UK shares. Further, due to its current unprofitability, it’s very hard to place a reliable valuation on it. This enhances risk and may indicate that the Darktrace share price has got more room to fall.</p>
<p>Despite this, the cyber-security market is growing quickly, and other cyber-security firms also have very high valuations. For example, US firm <strong>Cloudflare</strong> has a forward price-to-sales ratio of around 102. Like Darktrace, Cloudflare is also unprofitable. While this may indicate that Cloudflare is extremely overpriced, it could also show that Darktrace isn’t actually overly expensive.</p>
<p>Darktrace is also seeing strong growth. In fact, for the next financial year, revenue growth is <a href="https://ir.darktrace.com/regulatory-news/2021/09/15/1508773">expected to be around 36%</a>. This is not too far behind the 47% that Cloudflare is expecting. This shows that Darktrace has the potential to compete with many of the other big companies in the cyber-security market, and this could see the Darktrace share price soar over the next few years.</p>
<h2>Can the Darktrace share price rise further?</h2>
<p>I’ve always <a href="https://www.twelfthmagpie.com/2021/10/26/as-the-darktrace-share-price-crashes-should-i-buy/">avoided the shares</a> due to their lofty valuation. Nonetheless, after the recent dip, and considering the firm’s growth prospects, the share price seems far more reasonable. This means that there seems some scope for the shares to rise further. Therefore, I’m tempted to start a small position for my portfolio.  </p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/11/09/after-its-12-rise-whats-next-for-the-darktrace-share-price/">After its 12% rise, what’s next for the Darktrace share price?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Stuart Blair has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>Darktrace falls again! It&#8217;s not the only UK growth stock I&#8217;m avoiding</title>
                <link>https://www.twelfthmagpie.com/2021/11/03/darktrace-falls-again-its-not-the-only-uk-growth-stock-im-avoiding/</link>
                                <pubDate>Wed, 03 Nov 2021 14:35:07 +0000</pubDate>
                <dc:creator><![CDATA[Paul Summers]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Darktrace]]></category>
		<category><![CDATA[darktrace shares]]></category>
		<category><![CDATA[FTSE 100]]></category>
		<category><![CDATA[Growth shares]]></category>
		<category><![CDATA[UK growth stocks]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=251854</guid>
                                    <description><![CDATA[<p>The Darktrace plc (LON:DARK) share price continues to lose height. Paul Summers is steering clear of this and another unprofitable growth stock.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/11/03/darktrace-falls-again-its-not-the-only-uk-growth-stock-im-avoiding/">Darktrace falls again! It&#8217;s not the only UK growth stock I&#8217;m avoiding</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>The <strong>Darktrace </strong>share price (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) has been tumbling over the last few trading days. It&#8217;s down another 5% or so this morning. I previously suggested that this could be a <a href="https://www.twelfthmagpie.com/2021/08/20/is-the-darktrace-share-price-a-ticking-time-bomb/">ticking time bomb</a> for investors. And it&#8217;s not the only growth stock I&#8217;m keeping away from either! </p>
<h2>Why I&#8217;m still avoiding Darktrace</h2>
<p>I&#8217;m generally very bullish on the cybersecurity sector going forward. The sheer growth of online activity and the <a href="https://www.zdnet.com/article/what-is-the-internet-of-things-everything-you-need-to-know-about-the-iot-right-now/">Internet of Things</a> will greatly increase the pressure on businesses to protect customers and clients from any nefarious so and so. </p>
<p>Seen from this perspective, it&#8217;s not hard to understand why the Darktrace share price did so well initially. Unfortunately, I think we&#8217;re now seeing the (inevitable) backlash. Broker Peel Hunt&#8217;s less-than-complimentary research note was the catalyst, suggesting that the stock was worth only 473p. That&#8217;s less than half the level the Darktrace share price hit earlier in the year. That 473p is also 20% or so <em>lower</em> than the price as I type.</p>
<div class="tmf-chart-singleseries" data-title="Darktrace Plc Price" data-ticker="LSE:DARK" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>

<p>So could Darktrace fall to that level? Perhaps, if insiders began selling their stock. Some profit-taking may be inevitable. But cashing in as soon as the lock-up period ends today would send a message that even they think Peel Hunt may be right. </p>
<p>Not that I&#8217;d actually blame them. Despite the recent fall, Darktrace stock still boasted a heady valuation of 23 times sales before the market opened. That&#8217;s an awful lot of hope that remains priced in.</p>
<p>If I were to get exposure to this sector, I&#8217;d likely opt for a cheap exchange-traded fund such as <strong>L&amp;G Cyber Security</strong> instead. It&#8217;s delivered a 36% return over the last 12 months. That&#8217;s a lot less than Darktrace (+81%) but one needs to consider the risk/reward trade-off. Had I picked up the latter&#8217;s stock one month ago, I&#8217;d actually be 25% underwater!</p>
<h2>Another risky growth stock</h2>
<p>Today&#8217;s half-year update only serves to confirm my belief that ticket app <strong>Trainline</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-trn/">LSE: TRN</a>) is another growth stock I&#8217;d best avoid for now. Based on the double-digit percentage decline in its share price this morning, it seems I&#8217;m not alone.</p>
<div class="tmf-chart-singleseries" data-title="Trainline Plc Price" data-ticker="LSE:TRN" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>

<p class="atp">Yes, the numbers look great initially. Net ticket sales and revenue jumped 179% to £1bn and 151% to £78m, respectively, in the six months to the end of August year-on-year.</p>
<p class="atp">But let&#8217;s get things in perspective. I didn&#8217;t see many people sprinting to catch a train last year. As such, the latest growth was always on the cards. Moreover, TRN still registered an operating loss of £9m, even if this was much better than the £43m loss reported this time last year.</p>
<p class="atq">My chief concern here is that far fewer of us are returning to the office than expected. The explosion in the property market this year would tend to back this up. That&#8217;s concerning for holders, especially as TRN <a href="https://www.giffgaff.com/blog/which-train-app-should-you-using/">already faces competition</a>.</p>
<p>Making no change to previous guidance, Trainline believes it will generate full-year net ticket sales of between £2.4bn and £2.8bn. However, this is &#8220;<em>assuming the market recovery continues</em>&#8220;. With Covid-19 infection levels rising again, that may prove an assumption too far.</p>
<p>As an app, I like Trainline. As an investment, however, I struggle with it. Despite bullish talk of growth opportunities in Europe, I suspect ongoing (heavy) investment in staff and marketing will continue to impact sentiment.</p>
<p>As with Darktrace, I&#8217;m steering clear.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/11/03/darktrace-falls-again-its-not-the-only-uk-growth-stock-im-avoiding/">Darktrace falls again! It&#8217;s not the only UK growth stock I&#8217;m avoiding</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>Forget Darktrace’s share price! I’d buy these UK tech stocks instead</title>
                <link>https://www.twelfthmagpie.com/2021/11/03/forget-darktraces-share-price-id-buy-these-uk-tech-stocks-instead/</link>
                                <pubDate>Wed, 03 Nov 2021 12:23:25 +0000</pubDate>
                <dc:creator><![CDATA[Suraj Radhakrishnan]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Darktrace]]></category>
		<category><![CDATA[darktrace shares]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=252531</guid>
                                    <description><![CDATA[<p>Inflated valuations have hurt the Darktrace share price. And I think there are better options in the UK tech space that could offer incredible returns.  </p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/11/03/forget-darktraces-share-price-id-buy-these-uk-tech-stocks-instead/">Forget Darktrace’s share price! I’d buy these UK tech stocks instead</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>After its explosive debut in the UK market, the <strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE:DARK</a>) share price rose to 1,000p in September. But in the last two weeks, it has slid 37.5% and was trading at 599p at the time of writing this article earlier today.</p>
<p>This move came after Peel Hunt&#8217;s downgrade to ‘sell’ with a forecast price of 473p. The broker&#8217;s report suggested that the Darktrace share price was overvalued factoring in the revenue figures and low R&amp;D budget. </p>
<p>For me, historic performance is a crucial indicator of returns in the tech space. And for the past three years, Darktrace has been recording a net loss. But it should be noted that performance has been improving. The recently published half-yearly 2021 report showed an annual growth rate of 40% and 42% growth in its active customer base.</p>
<p>But I still think there are much better offerings in the UK market at the moment. Here are two stocks operating in exciting areas within the tech space that I think are much better growth options than Darktrace.</p>
<h2>FTSE 250 star</h2>
<p>I think software company <strong>Kainos</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-knos/">LSE: KNOS</a>) is often overlooked by investors. The company has excellent <a href="https://go.kainos.com/rs/272-PGO-379/images/Kainos-Annual-Report-2021.pdf">revenue figures</a> that have been growing steadily over the last decade.</p>
<p>Kainos provides solutions to improve communication and performance within companies. Given the digital work revolution in the last two years, it&#8217;s an area that has gained huge prominence. The company has a large client base including <strong>Netflix</strong>, Primark, <strong>ASOS</strong> and the NHS. This shows an established global presence in an incredibly competitive space.</p>
<p>Its shares have risen 62.5% in 2021 and an incredible 863% in the last five years. And I still think there&#8217;s a lot of room for growth, given the increasing need for digital workplace solutions.</p>
<p>But it operates in a very congested sector and competes with big names like <strong>Amazon</strong> Web Services and <strong>IBM</strong>. Also, given its share price explosion, it&#8217;s trading at a forward profit to earnings ratio (P/E) of 60x. But I&#8217;m not too bothered by the inflated valuation given the strong sustained financial performance. This is why I think Kainos looks like a much better tech pick for my portfolio today.</p>
<h2>Explosive mix of IT and energy</h2>
<p>I wrote about tech firm <strong>Aveva</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-av/">LSE:AV</a>) <a href="https://www.twelfthmagpie.com/2021/10/20/uk-tech-stocks-my-top-2-picks-with-explosive-potential/">last month</a> because of the its data-driven solutions for companies in the energy sector. Since then, the company has released the Aveva Data Hub, its own Software as a service (Saas) offering. This is part of its cloud computing division that works alongside the data solutions the company offers.</p>
<p>The company recently acquired OSIsoft for £3.8bn to improve its data services for clients like <strong>BP</strong>, <strong>GlaxoSmithKline</strong> and <strong>EDF</strong>. I think the energy sector will see some huge advancements in the coming years as fuel price hikes and coal shortages grip nations worldwide.</p>
<p>There are risks to consider when operating in an emerging area like data analytics. One new gamechanger could banish Aveva to obscurity. And that&#8217;s the ruthless world of tech. But the company invests heavily in R&amp;D and I think the probability of this is very low. Compared to Darktrace, Aveva has a long history of excellent returns and an established international clientele which is why I think it&#8217;s a better fit for my portfolio.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/11/03/forget-darktraces-share-price-id-buy-these-uk-tech-stocks-instead/">Forget Darktrace’s share price! I’d buy these UK tech stocks instead</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href="https://www.twelfthmagpie.com/2026/06/13/how-much-do-you-need-to-invest-to-build-a-100000-stock-and-shares-isa/">How much do you need to invest to build a £100,000 Stock and Shares ISA?</a></li></ul><p><em>The Motley Fool UK has recommended ASOS, GlaxoSmithKline, and Kainos. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>As the Darktrace share price crashes, should I buy?</title>
                <link>https://www.twelfthmagpie.com/2021/10/26/as-the-darktrace-share-price-crashes-should-i-buy/</link>
                                <pubDate>Tue, 26 Oct 2021 09:07:15 +0000</pubDate>
                <dc:creator><![CDATA[Stuart Blair]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[darktrace shares]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=250152</guid>
                                    <description><![CDATA[<p>The Darktrace share price crashed 16% yesterday, due to a broker note from Peel Hunt. Is this the dip that will tempt me to buy?</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/10/26/as-the-darktrace-share-price-crashes-should-i-buy/">As the Darktrace share price crashes, should I buy?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>In contrast to some other UK tech post-IPO periods, <a href="https://www.twelfthmagpie.com/2021/10/15/at-a-50-discount-is-the-thg-share-price-too-cheap-to-ignore/">such as <strong>THG </strong></a>and <strong>Deliveroo</strong>, <strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) has seen a great deal of success. Indeed, the Darktrace share price has managed to rise over 140% since its IPO. During this period, the  firm has also seen excellent revenue growth. But yesterday, amid a broker note giving it a sell rating, the Darktrace share price dropped around 16%. It&#8217;s now priced at under 800p. So, should I be buying this stock on the dip, or is there further to fall?</p>
<h2>What caused such a big fall?</h2>
<p>In most cases, a broker note doesn’t have too much of an impact. But yesterday, Peel Hunt gave a rather damning verdict, stating that the Darktrace share price has a downside of 50%. Clearly, this rattled investors, because at one point the stock was down as much as 27%. It did manage to recover some losses before the end of the day though.</p>
<p>It must be noted that a broker note doesn’t actually change the prospects of a company. It&#8217;s just an opinion. Even so, there were worrying signs for Darktrace. For example, according to the broker, some experts consider that the product is a <em>“gimmick”</em>. As this is how the firm generates its revenues, and is the basis of its valuation, this is not a good sign.</p>
<p>The broker also corroborated its sell rating with concerns over intensifying competition and the firm’s limited research and development spending. As such, it may seem hard to justify the company’s £6bn market capitalisation, and therefore, it&#8217;s clear to see why the Darktrace share price was punished so severely.</p>
<h2>Was the pullback overdone?</h2>
<p>Whenever a stock falls back so much, I always ask whether it&#8217;s a market overreaction. There are signs that this could be the case here. In fact, in the recent<a href="https://ir.darktrace.com/regulatory-news/2021/09/15/1508773"> full-year trading update</a>, the company was able to lift revenues by 41.3% to $281m. The customer base also grew by 45%. This gives me hope that Darktrace’s product, which is a <em>“fundamentally different approach</em>” to cyber defence, isn&#8217;t just a <em>gimmick.</em></p>
<p>The outlook for 2022 also looks strong, with revenue growth expected to be between 35% and 37%. This demonstrates the potential of the tech company.</p>
<p>Unfortunately, the company is still losing money, and this does make it slightly harder to give it a fair valuation. In fact, in the full-year trading update, it reported a loss of $150m. The current route to profitability is also uncertain. Consequently, the pullback in the Darktrace share price may not necessarily have been overdone, and it may have just pulled the stock back to reality.</p>
<h2>Where next for the Darktrace share price?</h2>
<p>After its mighty fall yesterday, Darktrace certainly trades on a fairer valuation. Combined with the company’s strong growth prospects, there is, therefore, some hope that it will be able to rise further. I’m going to sit on the sidelines during this period of volatility however, until I feel that the firm 100% deserves its high valuation.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/10/26/as-the-darktrace-share-price-crashes-should-i-buy/">As the Darktrace share price crashes, should I buy?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Stuart Blair has no position in any of the shares mentioned. The Motley Fool UK has recommended Deliveroo Holdings Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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                                <title>As the Darktrace share price soars, is this a stock to buy?</title>
                <link>https://www.twelfthmagpie.com/2021/09/15/as-the-darktrace-share-price-soars-is-this-a-stock-to-buy/</link>
                                <pubDate>Wed, 15 Sep 2021 09:48:15 +0000</pubDate>
                <dc:creator><![CDATA[Stuart Blair]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[darktrace shares]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=242690</guid>
                                    <description><![CDATA[<p>The Darktrace share price has soared on its trading update today. Is this now this perfect time to buy this UK tech stock? </p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/09/15/as-the-darktrace-share-price-soars-is-this-a-stock-to-buy/">As the Darktrace share price soars, is this a stock to buy?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>After today’s trading update, the Darktrace share price soared around 10% in early morning trading and is still up almost 5% mid-morning. This at one point took it to 700p, a rise of over 100% since its IPO in April. So, should I now be buying this UK tech stock or am I too late?</p>
<h2>Trading update</h2>
<p>Darktrace’s rise today is due to its <a href="https://ir.darktrace.com/regulatory-news/2021/09/15/1508773">excellent trading update</a>. In fact, full-year revenues were 41.3% higher than last year at $281m. The customer base also grew by 45% to reach 5,605. The fact that customer numbers are rising is promising. The firm states that it uses a <em>“fundamentally different approach”</em> to cyber defence, using <a href="https://www.twelfthmagpie.com/investing/2021/07/27/the-darktrace-share-price-is-over-700p-can-it-rise-further/">artificial intelligence instead of just humans</a>. It is hoped that this can revolutionise the world of cyber defence. Accordingly, the fact that the customer base is rising gives me hope that it is currently successful in its aims.</p>
<p>The Darktrace share price also rose due to the company raising its full-year 2022 expectations. Indeed, the firm now expects revenue growth of between 35% and 37%, up from previous guidance of 29%-32%. With future performance set to be strong, it is clear why investors, and the company itself, are optimistic.</p>
<p>But there were some worries that could be taken from the trading update too. In fact, the company recorded a net loss of around $150m, a rise of 421% from last year. Although a loss was expected, especially as it’s currently pouring money into developing its products, this was higher than I would like.</p>
<p>Losses are also likely to continue next year, as the firm continues to be impacted by share-based payments and employer tax charges that have resulted from its transition to a public company. This means that the current route to profitability is uncertain, and this is a risk that must be considered.</p>
<h2>Other factors</h2>
<p>One slight negative is the presence of Mike Lynch, the company’s first shareholder. Lynch was the founder of Autonomy and is now facing 17 counts of fraud and conspiracy in the US. This is due to accusations that he cooked the books at Autonomy before its sale to <strong>HP</strong> in 2011. The fact that Lynch and his wife own around 15% of Darktrace shares is therefore a negative, and something that could have ramifications in the future.</p>
<p>But fortunately, Darktrace’s connections with Autonomy seem to be limited, and management has no ties with Lynch’s former company. Lynch also has no role in management and is solely a shareholder. This should limit the damage, and hopefully the share price will not be affected.</p>
<h2>What’s next for the Darktrace share price?</h2>
<p>I believe that the share price has significant upside potential. This is because its products are in demand, especially as automated security functions are seen as the way forward.</p>
<p>Even so, its valuation is lofty, trading at a price-to-sales ratio of around 24. This implies that strong growth is already factored in to the share price, and any sign that growth is slowing will be punished severely. As such, despite the promise that this UK tech stock holds, the valuation is slightly too high for me. I’ll be waiting for a pullback before buying.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/09/15/as-the-darktrace-share-price-soars-is-this-a-stock-to-buy/">As the Darktrace share price soars, is this a stock to buy?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><i>Stuart Blair has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes </i><a style="font-style: italic;" href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></p>
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                                <title>The Darktrace share price is over 700p. Can it rise further?</title>
                <link>https://www.twelfthmagpie.com/2021/07/27/the-darktrace-share-price-is-over-700p-can-it-rise-further/</link>
                                <pubDate>Tue, 27 Jul 2021 06:16:05 +0000</pubDate>
                <dc:creator><![CDATA[Stuart Blair]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[darktrace shares]]></category>

                <guid isPermaLink="false">https://www.twelfthmagpie.com/?p=232502</guid>
                                    <description><![CDATA[<p>The Darktrace share price has risen over 100% since its IPO. Does this mean that it's the time to bank profits or is this a UK share to buy?</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/07/27/the-darktrace-share-price-is-over-700p-can-it-rise-further/">The Darktrace share price is over 700p. Can it rise further?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[<p>The <strong>Darktrace</strong> (<a class="tickerized-link" href="https://www.twelfthmagpie.com/tickers/lse-dark/">LSE: DARK</a>) share price has exceeded expectations since its IPO, rising over 100%. Such an incredible post-IPO performance always piques my interest, especially in fairly recent start-up companies. So, what is behind this incredible rise, and should I be buying this stock for my portfolio?</p>
<h2>The business</h2>
<p>Darktrace is a cyber-security firm that uses artificial intelligence to help detect and deal with any cyber threats. As stated by the firm itself, this is a <em>“fundamentally different approach”</em> to cyber-defence. It is also hoped that the use of artificial intelligence will be able to thwart cyber-attacks that would have gone undetected by humans.</p>
<p>I find this business model promising. Firstly, it is clearly unique, and this helps distinguish it from other competitors. Secondly, due to increases in cyber-crime over the past few years, there is room for expansion in this area. These two factors offer a partial explanation for the rise in the Darktrace share price.</p>
<p>Such a unique business model has also attracted numerous different customers. In fact, Darktrace currently has over 5,000 customers, based in over 100 different countries. The represents growth of 42% over the last year. </p>
<h2>Other factors to consider</h2>
<p>Growth prospects for the company are also strong. In fact, the company expects <a href="https://ir.darktrace.com/regulatory-news/2021/7/15/1491644">FY 2021 revenue growth of 40%</a>, to at least $278m. During the current financial year, management also expects revenue growth of 29%-32%, up from a previous estimate of 27%-30%. This highlights the excellent potential of this UK share, a factor that will hopefully cause the Darktrace share price to rise further.</p>
<p>Even so, there are risks, including the firm’s unprofitability. Since its inception, the firm has incurred losses each year. Most recently, during the year to June 2020, it announced an operating loss of $25m. It is not expected to reach profitability over the next few years. Although unprofitability is common among tech stocks, it still means that outside funding is necessary, and this may include issuing more shares. This would likely have a negative effect on the Darktrace share price, due to share dilution.</p>
<p>Further, the company does have a high market capitalisation of around £5bn. Comparing this to expected revenues of $278m gives the company a price-to-sales ratio of around 26. This can be compared to other cyber-security firms, like <strong>Palo Alto</strong>, which has a lower price-to-sales ratio of around 10. This means that if Darktrace cannot maintain its strong revenue growth, investor sentiment could be dampened considerably.</p>
<p>The final risk is the potential conviction of Mike Lynch, who currently faces 17 counts of fraud and conspiracy in the US. Lynch owns 4.5% of Darktrace, and he would be forced to sell this stake if he was convicted. This potential controversy is an unwanted distraction for the company, and could also damage Darktrace&#8217;s reputation. </p>
<h2>Has the Darktrace share price got upside potential?</h2>
<p>Overall, I am extremely impressed with Darktrace. It has a unique business model, in a <a href="https://www.twelfthmagpie.com/investing/2020/06/24/want-to-invest-in-cybersecurity-stocks-heres-what-id-do/">high-growth area</a>, and its current growth is excellent. As such, I feel that there is long-term upside potential. Despite this, I am also concerned by its current valuation and think that investors may use the recent rise in the Darktrace share price to bank profits, especially due to the Lynch controversy. This would lead to downward pressure on the share price and is the reason I’m staying away for now.</p>
<p>The post <a href="https://www.twelfthmagpie.com/2021/07/27/the-darktrace-share-price-is-over-700p-can-it-rise-further/">The Darktrace share price is over 700p. Can it rise further?</a> appeared first on <a href="https://www.twelfthmagpie.com">The Twelfth Magpie</a>.</p>
<p><strong>More reading</strong></p><ul><li> <a href='https://www.twelfthmagpie.com/2026/07/01/forget-meal-deals-heres-how-8-a-day-could-be-worth-357000/'>Forget meal deals! Here&#8217;s how £8 a day could be worth £357,000</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-7-yield-is-this-dividend-share-a-no-brainer/'>With a 7% yield, is this dividend share a no-brainer?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/the-cmc-markets-share-price-is-smashing-the-ftse-100-in-2026-is-there-an-opportunity-here/'>The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/with-a-yield-of-6-8-and-a-p-e-ratio-of-12-1-is-this-a-dirt-cheap-ftse-250-stock-to-consider/'>With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?</a></li><li> <a href='https://www.twelfthmagpie.com/2026/07/01/will-spacex-nvidia-or-alphabet-be-the-first-10trn-stock/'>Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?</a></li></ul><p><em>Stuart Blair has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes <a href="https://www.twelfthmagpie.com/help/disclaimer/what-does-it-mean-to-be-motley/">us better investors.</a></em></p>
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