Trend Micro Incorporated (4704.T) fair value

ACCE thesis

Trend Micro sells endpoint protection, cloud workload security, and its Vision One extended detection and response platform, which bundles email, network, endpoint and cloud telemetry into one subscription sold largely to enterprises and managed service providers in Japan, Europe and North America. The moat is switching cost and installed base: security buyers rarely rip out a deployed agent, and a 77.4% gross margin on recurring licences reflects that pricing power. Revenue is growing 12.5% while the operating margin is only 8.3%, so the question for a PM is whether the company is still spending heavily to reposition toward platform sales or whether operating leverage is about to show up in earnings. At 25.1x trailing and 24.5x forward earnings, the market is paying a fair multiple for growth that is not yet visible in the bottom line, and a 30.0% return on equity suggests the capital base is being used efficiently. This is worth a deeper look at the margin trajectory and the Vision One adoption figures before anything else.