Shares of cyber-security company Mimecast (Nasdaq: MIME) shot up about 20% on February 12, establishing a new all-time high in the process. The catalyst: a third-quarter earnings report that showed the company continues to excel on all fronts.

If you purchased MIME when I recommended it in my Game-Changing Stocks service a little over a year ago, you’re sitting on an 80% gain right now.

Before I touch on what’s sparked the recent rally, I want to highlight what exactly Mimecast does, for those who aren’t premium subscribers. 

Leveraging The Cloud
Mimecast, which went public in November 2015, is a bright young company in the business of enabling, securing and protecting cloud-based email for a variety of companies. 

#-ad_banner-#As you probably know, moving to the cloud is one of the most important business trends of the past decade. Organizations that use the cloud benefit from the flexibility of the services, the usage-based subscription model, the lowered capital expenses and the improved accessibility for remote or dispersed employees.

But dangers abound… Data breaches. Compromised credentials. Hacked accounts. Data loss from an attack. These are just a few examples of things that can go wrong. 

Some of these threats stem from the simple fact that the companies affected had exposure to the internet in the first place, while other dangers are specific to the set of tools and technology the business uses. 

And the use of email — an essential (and still growing) communication tool — results in a whole other set of issues. Email has also long been one of the key points for malicious entry into a company’s virtual premises. This has become an even larger threat with email going to the cloud. (For companies using the cloud business model, communicating via cloud-based email is often a natural extension.)

That’s where Mimecast comes in.

Mimecast targets small- and mid-sized businesses with 100 to 5,000 employees. Many companies of this size are more likely to outsource their IT security functions.

The company provides services to make sure email data are backed up and can be restored in the event of a loss. It also offers Targeted Threat Protection (TTP), a complex product protecting attachments and URLs (web addresses). TPP also protects email users against impersonation, which, unfortunately, is another growing threat. Lastly, Mimecast also offers cloud archiving and email continuity services. 

In short, this game-changer makes both business email and data safer. And despite its very young age, it does that for more than 28,000 companies and their millions of employees worldwide, managing 342 million emails daily.

What’s Behind The Rally
Assuaging sceptics, MIME outperformed both on the earnings and the revenue lines in its most recent quarterly report. Sales of $87.6 million in the three months ended Dec. 31 grew 30% year-over-year — the result of high customer retention, sales to existing subscribers, and the addition of 1,000 net new customers to the MIME’s security platform. 

Here’s just one highlight of the quarter: MIME closed a seven-figure deal that was the largest ever for the company.

No wonder MIME also guided for strong revenue growth in the year ended March 31. The company now says it will bring in $338.7-$339.7 million, vs the previously expected $333 million. For the next fiscal year, MIME projects revenue at $413-$427 million, vs. consensus estimates of $405 million.

Action To Take
If you followed my advice in Game-Changing Stocks and want to take some of those gains off the table, I would understand. But I think MIME has just proven that it’s a good company with a business model that has legs and with growth that isn’t likely to give way any time soon. 

If you’re looking for a solid growth story, this may be just what you’re looking for. While much of the near-term gain might be already in place, the long-term upside potential remains strong. 

But as for my Game-Changing Stocks subscribers and myself, I’m advising a wait-and-see approach. While I see significant long-term upside in the shares, I suspect we will see some volatility here.

P.S. While MIME has been a big winner for us over at Game-Changing Stocks, a lot of the easy money has already been made. That’s why I want to tell you about a group of picks I’m even more excited about… You see, each year we release a report with big, bold predictions for the coming year. Some of them are controversial — but they all have triple-digit-plus potential for investors as we head into 2019. And you can find it all in my latest report: 9 Game-Changing Investment Predictions for 2019.