Comcast (CMCSA - Free Report) recently announced the acquisition of BluVector, an Arlington-based cybersecurity solutions provider. BluVector uses artificial intelligence (AI) and machine learning (ML) to detect, analyze and contain a wide range of cyber-threats, including “fileless malware, zero-day malware and ransomware.”
Although the financial details of the transaction were not disclosed, Comcast plans to expand BluVector’s business and develop new cybersecurity technologies. The appointment of cyber-security industry veteran, Eric Malawer as the CEO of BluVector is a step toward that direction. Notably, Malawer previously served as cybersecurity staff director for the House Committee on Homeland Security.
Per ZDNet, BluVector’s solutions also integrate with a number of cybersecurity services and vendors, including “Palo Alto Networks, Check Point, CrowdStrike, Carbon Black, IBM QRadar and Splunk.” Apart from the commercial cybersecurity market, BluVector serves the public market. Notably, the company won a multi-million dollar U.S. government agency contract in September 2018.
The acquisition of BluVector will help Comcast gain footprint in the rapidly growing cybersecurity market. Per Market Research Future’s (MRFR) study, global cybersecurity market is expected to see a CAGR of 11% to reach $251 billion over the 2017-2023 time frame.
Comcast Entering New End-Markets: Key Catalyst
Comcast is a dominant name in the media industry, courtesy of its huge cable business, NBCUniversal and the recently acquired Sky.
The company is benefiting from solid growth in residential high-speed Internet customers. Additionally, Green Book won the Oscar for Best Picture, which is a noteworthy development for investors. Further, the Sky acquisition expands Comcast’s international reach.
However, like most of the traditional media companies, Comcast is also losing voice and video subscribers. Cord-cutting due to the increasing proliferation of streaming providers like Netflix (NFLX - Free Report) , Hulu (in which Comcast has a minority stake) and HBO has negatively impacted the company’s growth prospects in the video segment.
To lower its dependence on legacy cable and media business, Comcast has been looking to diversify its business model by entering new end-markets like streaming, healthcare and cybersecurity.
Notably, Comcast’s division, NBCUniversal is set to launch its streaming service early 2020. The ad-supported service will be free to NBCUniversal's pay TV subscribers in the United States and major international markets.
Despite Netflix’s dominance and a plethora of upcoming services from the likes of Apple (AAPL - Free Report) and Disney (DIS - Free Report) , the streaming market presents significant growth opportunity. Per Statista, number of users is expected to increase from 967.6 million in 2017 to 1.24 billion in 2023. Revenues are expected to see a CAGR of 2.4% over the 2019-2023 time frame.
Moreover, Comcast is eyeing healthcare market. In April 2018, the company inked a partnership with Independence Health Group to launch a new consumer-oriented healthcare technology platform. Per CNBC, the 50-50 joint venture, which will run as an independent new firm, is expected to start operating on a national level in the second half of 2019.
Comcast currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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