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Datto Holding Corp.

Software

ABOUT THE COMPANY

Ticker
MSP
Buy market
$25,37
take profit
$30,50

Datto is a leading provider of cloud software and technology solutions for managed service providers (MSPs). MSPs use Datto solutions to protect SMB IT infrastructures from cyberattacks, downtime, and data loss.

Datto went public on October 21, 2020, placing 22 million ordinary shares on the market at $ 27 each, and as a result, raised almost $ 600 million.

Today the paper is trading 19% below the IPO opening price.

MARKET TRENDS

  • 17,000 Managed Service Providers (MSPs) are developing their business with the Datto platform, providing solutions to more than 1 million companies worldwide.

Small and medium-sized businesses continue to adopt digital products and therefore demand MSPs to meet their evolving IT needs. In particular, they need safe access to the cloud to manage infrastructure. Data storage and backup technology help small businesses leverage big data. 

  • Cyberattacks, especially ransomware, threaten businesses around the world.

The COVID-19 pandemic made people work from home, which has created ideal conditions for cybercriminals. The FBI said the number of cyberattacks has risen more than 400% since the start of the pandemic.

Ransomware remains the most prevalent cyber threat for small and medium-sized businesses, according to a 2020 Datto report. 60% of mobile operators report that their SMB customers were attacked in the first half of 2020.

  • Datto has a large market.

According to the consulting company Frost & Sullivan, in 2019 the MSP market for small and medium-sized businesses was estimated at $ 137 billion, with $ 28 billion in the target market (TAM) Datto. Analysts predict that the total MSP market for small and medium-sized businesses will grow by 16.4% annually, while the target market for Datto will grow by 17% and will reach $ 52 billion by 2023.

FINANCAIL PERFORMANCE

Datto’s first earnings report exceeded expectations. The company demonstrated growth in key indicators, which provides a great opportunity for further growth. 

Datto Holding Corp. Total Revenu 

Datto Holding Corp. EBITDA

FORECASTS

Institutional investors own only 2.9% of Datto shares. This suggests that some large funds have not yet invested in the company.

The company is not well researched and has good potential. It has its own integrated solution stack and MSP-centric approach. With a help of the inhouse developed product, the company can count on strong and long-term relationships with its clients.

Rasion Asset Management analytics team is confident that the growth of Datto shares is ensured, so we purchased the paper on the fund’s balance sheet with an investment horizon of about 6 months.