Check Out Oppenheimer's Take On Software, Cybersecurity

Cybersecurity, big data and cloud computing have become increasingly "mission critical" to customers who will support strong results from infrastructure software companies, an analyst said Tuesday.

Oppenheimer's Shaul Eyal expects a raft of companies in the sector to post first-quarter results that are at least in line with Wall Street's expectations, with foreign exchange the sole significant worry.

Takeover candidates within the sector currently include Clicksoftware Technologies Ltd (NASDAQ: CKSW), Nuance Communications Inc. (NASDAQ: NUAN) and Comverse Inc (NASDAQ: CNSI), Eyal said.

Related Link: The Piper Jaffray Note Shaking The Cybersecurity World

Shareholder activism, low-cost capital and relatively high cash balances are sparking increasing merger activity, according to Eyal.

But apart from buyouts, Eyal expects the sector to be driven by an increasing number of security breaches, growing acceptance of cloud computing and the rise of big data analytics.

For the upcoming first quarter, Eyal singled out nine companies that he believes will post particularly strong results:

• Cyberark Software Ltd (NASDAQ: CYBR) should post quarterly results "at the higher end of guidance," according to Eyal, who raised his target 18 percent to $65.
• Palo Alto Networks Inc (NYSE: PANW)'s "impressive growth" and new products prompted Eyal to raise his target 16 percent to $175. The company completes its quarter in April.
• Check Point Software Technologies Ltd. (NASDAQ: CHKP) will post first-quarter earnings of $0.91 a share according to Eyal, in line with the Wall Street consensus.
• Verint Systems Inc. (NASDAQ: VRNT) is targeting double-digit revenue growth for 2015, Eyal said.
• Nice-Systems Ltd (ADR) (NASDAQ: NICE) is "executing well" and getting higher prices by handling greater complexity, according to Eyal.
• Imperva Inc (NYSE: IMPV) has a "healthy pipeline" and improved focus on sales, according to Eyal, who expects a loss of $0.38 a share, in line with other analysts.
• Splunk Inc (NASDAQ: SPLK) will post a first-quarter loss of $0.02 a share in Eyal's view, versus the Wall Street consensus calling for a loss of $0.03 a share.
• Amdocs Limited (NASDAQ: DOX) continues to benefit from rising network complexity, subscriber counts and competition, according to Eyal. The Street expects first-quarter earnings of $0.82 a share.
• Fortinet Inc (NASDAQ: FTNT) will post first-quarter earnings of $0.06 according to Eyal.