Cybersecurity companies in Israel could see staff drafted into war: Raymond James
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Israel has already called up 300,000 reservists for its military amid the war with Hamas, which could impact personnel at various cybersecurity firms located in the region, investment firm Raymond James said on Tuesday. 
âCheck Point Software (NASDAQ:CHKP), Palo Alto Networks (NASDAQ:PANW) and CyberArk Software (NASDAQ:CYBR) are examples of organizations that call out the risk of employees being obligated to perform annual military reserve duty and could be called into active duty,â analyst Adam Tindle wrote in a note.
âWe certainly hope for a different outcome but will have to monitor this for threat of disruption to operations.â
The conflict in the Middle East is also eroding the Israeli shekel to USD exchange rate, with the Bank of Israel selling up to $30B of foreign reserves.
âAll else equal, a weakening shekel would aid the margin/earnings profile of CHKP,â the analyst said. âHowever, we are not making that call with the unknown impact from operational disruption that comes with war, simply flagging the mechanics of the model.â
Check Point Software (CHKP): 42% of Check Point's employees and 61% of property and equipment, or P&E, are in Israel, including its principal executive offices and R&D facilities, which are located 40 miles from the nearest point of Gaza Strip border. 
Palo Alto Networks (PANW): 12% of the company's property and equipment is in Israel. Raymond James estimated that about 7% of its employees are in the country.
SentinelOne (NYSE:S): 44% of the company's P&E is in Israel, and R&D employees are primarily within Israel, India, Czech Republic and remote.
Okta (OKTA): It is unclear whether the company has offices in Israel but competitor CyberArk Software (CYBR) has nearly 70% of property and equipment in Israel.
Rapid7 (RPD): R&D offices in Israel.
Cybersecurity stocks were mixed on Monday as investors digested the implications of the Israel-Hamas war and how those companies with a heavy presence in the region may be impacted.
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