HUB Cyber Security (Israel) Ltd. (NASDAQ: HUBC) is an Israeli cybersecurity company specializing in protecting confidential commercial and government data. The company was established in 2017 by veterans of the 8200 and 81 elite intelligence units of the Israeli Intelligence Corps unit. These units specialize in code decryption, counterintelligence, cyberwarfare, military intelligence, and surveillance. Following its disappointing IPO on March 1st, HUBC stock ran 132% to a high of $3.10 before giving up some of its gains. While its recent momentum makes HUBC one to watch, its edge in the confidential computing industry could make it one of the cybersecurity stocks on the rise.
HUBC Stock News
It’s worth noting the similarities between HUBC and another major Israeli cybersecurity company – CyberArk Software Ltd. (NASDAQ: CYBR). CYBR’s technology gave it an edge in the identity security market and its stock currently trades at more than $145 per share partly thanks to this first-mover advantage.
Given that HUBC’s technology has the potential to revolutionize the cybersecurity industry, HUBC stock could appreciate over the coming years as it penetrates the US market. The company is preparing for an online investors event on March 28th and its management could share updates with investors on the company’s new strategy as a publicly listed US company.
Revolutionizing The Industry
Millions of confidential records have been stolen, held ransom, or exposed on a daily basis due to current cybersecurity systems’ flaws. Most cybersecurity systems offer data protection for when data is stored on a hard drive or in transit such as sent by email. This leaves confidential data exposed to potential cyberattacks when the data is used by the computer’s memory and CPU. HUBC could provide the first service which tackles this overlooked cybersecurity issue thanks to confidential computing and its HUB Silicon Chip.
Confidential computing is the most innovative approach to cybersecurity spearheading a $54 billion market with an aggressive 90%-95% CAGR. Essentially, confidential computing keeps data encrypted in a secure environment while it’s being used or processed by applications.
HUBC has already made a notable impression on this lucrative industry as a member of the Confidential Computing Consortium (CCC) which includes companies like Meta, Microsoft, Huawei, Intel, Nvidia, AMD, and most importantly Google. The consortium is dedicated to defining and accelerating the adoption of confidential computing by bringing together hardware vendors, cloud providers, and software developers to achieve this common goal.
Another bullish sign for investors is HUBC’s work with Google to create a solution for securing data on Google Cloud using HUBC’s core technologies. Cloud storage has attracted a lot of customers due to its low cost and flexibility of cloud processing and storage. But as enticing as cloud storage can be, it can come at the price of the privacy and security of customers’ data. Many cloud providers tried to solve this issue using data encryption processes, but this approach is not ideal since customers are responsible for protecting their encryption keys – putting the data in danger of leaks.
To solve this problem HUBC used the CCC’s confidential computing technology to overcome inherent cloud weaknesses by creating a secure environment for the creation and distribution of these keys. However, this method of confidential computing chiefly benefits high-volume cloud users.
Working to create an easy-to-scale, high-fidelity solution for both small and large organizations, HUBC is planning to capitalize on the untapped market of organizations operating in heavily regulated industries like finance, insurance, and healthcare. Since these businesses have yet to benefit from cloud advantages due to the security risks, HUBC could become the go-to cybersecurity provider for these industries. In that way, HUBC could be one of the most promising cybersecurity stocks to buy at current levels.
HUB Silicon Chip
While HUB Security offers cybersecurity solutions through a variety of products such as its PCI Card Module and 48U Powerhouse Enterprise Server Module, the company’s silicon chip for low-powered IoT devices is a product release investors should watch for.
Currently, in the advanced stage of development, HUB Silicon is HUBC’s next-generation device putting all of HUBC’s cybersecurity functionality on a silicon chip. A single HUB Silicon chip sits directly on the motherboard of network components and will provide both the processing power and cybersecurity for network devices.
HUBC anticipates that HUB Silicon will be installed on an OEM basis by equipment manufacturers and will become an industry-standard cybersecurity solution offered by component manufacturers.
Described as “cybersecurity on a chip”, HUB Silicon has the potential to revolutionize the cybersecurity landscape and its release could be a catalyst for the HUBC stock price. As a result, HUBC could be one of the cybersecurity stocks to watch closely this year.
Similarities with CYBR
In many ways, HUBC could be on track to follow in the footsteps of CyberArk Software Ltd. which released a first-of-its-kind identity security product in 2014.
This product was revolutionary for the cybersecurity industry because identity security secures all identities of a given organization by assuming that any identity can be compromised under certain conditions and create potential threats to an organization’s most valuable assets. This product was a massive catalyst for CYBR at its IPO in 2014.
While CYBR stock IPO’ed at $16 per share at the time, its stock price appreciated as its revenue growth accelerated from $66.1 million to $102.9 million with its US expansion in 2014 to $592 million last year. As a result of this impressive growth, CYBR stock is now considered one of the most profitable cybersecurity stocks.
Similarly, HUBC is targeting the USA which could lead to greater revenue growth in the coming years since HUBC generated 98% of its revenues from Europe, the Middle East, and Africa, and only 2% of its revenues from the United States in 2021. By listing on the NASDAQ, HUBC is in a better position to expand its presence in the US market – pushing it towards its goal of $712 million in revenue by 2026.
If HUBC is able to gain market share in the US with these products, it could one day become a major player in the cybersecurity market like CYBR.
Ark Invest CEO – Cathie Woods – could see the same potential in HUBC since the ARK Israel Innovative Technology ETF (IZRL) currently includes 355,241 shares of HUBC making up .71% of the ETF’s holdings. Interestingly, this same ETF holds 17,984 shares of CYBR as well. Considering this investment and HUBC’s upcoming investor event, HUBC could be one of the cybersecurity stocks to watch this week.
Upcoming Investor Event
HUBC plans to host an online investor event on March 28, 2023, at 10 a.m. EST. The event will be led by HUBC’s CEO – Uzi Moskovich – and other members of the company’s management team. During the event, these company insiders will discuss the company’s business progress, new developments, vision, and strategic plans. Given that the company could share some significant updates at this event, HUBC could be one of the cybersecurity stocks to watch closely.
HUBC Stock Financials
HUBC announced that it was expecting $115 million in revenues in 2022 during its latest investor presentation. HUBC is expecting to gain over $175 million in revenue this year and $20+ million EBITDA. HUBC is also expecting $712 million in revenues in 2026 and growth in their gross margin from 32% in 2022 to 63% in 2026.
@Retro1upArmy is speculating HUBC’s upcoming investors’ event could be the reason for Cathie Wood increasing its holdings in the company.
@MaryMichelleNay is bullish on HUBC’s prospects thanks to the growing defense cybersecurity market.
HUBC stock recently broke through its $1.89 support and is trading below the 21 and 50 MAs on the hourly. Given investors’ trepidation towards SPACs, it is not surprising HUBC stock fell to an all-time low of $1.12 right after its IPO.
HUBC made a new high at $3.10 after announcing its collaboration with Google for a cloud security and data privacy solution for Google Cloud. If the company releases new updates regarding this project at its investor day event, then the stock may spike up again on the news.
HUBC is currently trading in a sideways channel and the RSI is neutral at 35. As is, the stock could continue to fall toward its support at $1.75 without another catalyst to drive momentum. Trading volume has continued to drop off since March 17th but the investors’ event could help bring volume back to the stock.
A possible play would be to take a position on the breakout and retest above the $1.89 resistance. Traders could take profit at the 21 MA, 50 MA, and $2.21 resistance with a stop loss at the 1.75 support.
HUBC Stock Forecast
The HUBC stock forecast appears promising as the company’s successful SPAC listing on the NASDAQ has already increased investors’ interest in the cybersecurity company. With its investors’ event on March 28th and Ark Invests’ recent investment in the company, HUBC stock could continue to gain momentum depending on what news is released at the company’s event.
But in the long-term, HUBC’s number of customers could increase as it works to capitalize on the US market. Considering that HUBC already has 1500 customers, the company appears on track to gain more market share this year as well. Its working relationship with Google on its Google Cloud security and membership in the Confidential Computing Consortium put HUBC at the forefront of the $54 billion confidential computing market. The release of its HUB silicon chip will be another catalyst to watch for this cybersecurity stock as the company works towards its 2026 goal of $712 million in revenue. In light of these catalysts, HUBC could be one of the best cybersecurity stocks to hold onto for the long term.
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