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What: Shares of Barracuda Networks (NYSE:CUDA) rose 45.8% in July 2016, according to data from S&P Global Market Intelligence. The catalyst for Barracuda's surge was a strong first-quarter earnings report.

So what: The network security specialist saw sales rise 11% year over year in the first quarter, while analysts would have settled for 7% revenue growth. On the bottom line, Barracuda nearly doubled Wall Street's consensus target, with adjusted earnings of $0.20 per share.

The company lengthened its list of active customers by 14%, lifted its recurring revenue contracts 20% higher, and generally impressed in this report.

CUDA Chart

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Now what: As good as the first-quarter results were, Barracuda isn't exactly known for posting predictably great numbers. Two of its last four quarterly reports have triggered next-day share price plunges of 33% or more. All told, the stock is down 18% over the last 52 weeks.

The company is chasing market share in the fledgling market for Internet of Things security tools. It's a crowded sector, and Barracuda is one of the smaller players in it. These efforts could spark serious revenue and bottom-line growth over the next few years or perhaps attract suitors for a buyout exit. But that's only if the strategy works out as planned, which isn't always the case for this company. There's still a lot of room for swings to the downside.

In short, Barracuda is a promising but risky bet. Ride those IoT chips if you want to -- or don't. Current shareholders who don't want to deal with huge volatility could take their July profits and walk away at this point.