Three Cybersecurity Stocks To Consider As Cyberattacks Persist

SailPoint is holding Net Score high while expanding its presence as is Zscaler. CrowdStrike making moves up and to the right and Fortinet is expanding while maintaining momentum. It’s notable decrease in momentum could, over time, be buoyed by an acquisition of Splunk. While the graph above is an eye chart, this shows only the companies ETR captures in its survey with more than 50 mentions. And there are many more out there which don’t get reported in the ETR spending data. So the first takeaway is this crowded market and with the private funding of startups it’s only getting more crowded.

Comparatively, Asia makes up 10% of the total, while the Americas make up 40%. Microsoft may not be the first company that comes to mind when considering companies to purchase the  best cybersecurity stocks. However, Microsoft is an attractive option if you want exposure to the industry in a way that allows you to sleep soundly regardless of what is occurring in the market. However, the cybersecurity division is responsible for a rising company earnings. The cloud-based Office 365 software can also incorporate all the business’ security measures.

• Its top three holdings were Varonis [VRNS], Fortinet [FTNT] and Okta [OKTA] as of 10 January.
• Other cybersecurity firms with a sizable government business include Tenable, Rapid7 and CyberArk (CYBR).
• For the most part, the growth prospects for cybersecurity stocks remain strong.
• Okta makes it even without Auth0, which has the #1 Net Score in this data set and 115 Shared N. So you can add that to Okta.
• Much of that growth came from the company’s expanding business with the federal government.

It has also developed the lower cost Cloud MVX and MVX Smart Grid intelligent threat detection solutions for large enterprises and mid-market businesses. The reviews published on vpnMentor are written by experts that examine the products according to our strict reviewing standards. The rankings we publish may take into consideration the affiliate commissions we earn for purchases through links on our website. VpnMentor contains reviews that were written by our experts and follow the strict reviewing standards, including ethical standards, that we have adopted.

Datadog is less than half the size of Splunk revenue-wise but it’s valuation is more than two and a half times greater. Nary a week goes by without more concerning news about cyber attacks. The latest focus in the headlines is Russia’s relentless  attacks on critical infrastructure in the Ukraine– including banking, government Websites and weaponizing information to spread panic. The jump in defense stocks comes after German Chancellor Olaf Scholz said that defense spending in Europe’s biggest economy will be increased to 2% of gross domestic product, from an estimated 1.5% in 2021.

All of this information helps investors consider opportunities for investment in cyber security. Fortinet is another one of the big players in cybersecurity, with strong growth. In the company’s third quarter, revenue was up 33% year-over-year to $1.15 billion.

Cloud Security

As the demand for this industry balloons in a changing world, let’s look at five stocks that look promising for 2018, and which would work great as part of a cybersecurity ETF (Exchange-Traded Fund). Infrastructure monitoring can help organizations identify security threats like network intrusions, malware infections and denial-of-service attacks. It also helps to ensure compliance with regulatory requirements such as HIPAA, PCI DSS and GDPR. Revenue was up 25% year-over-year to $1.56 billion, which was above the company’s own guidance range of $1.535 billion to $1.555 billion. Non-GAAP profits came in at $266.4 million, or 83 cents a share, up from $170.3 million, or 55 cents, year-over-year.

• Because it’s cloud-based, CrowdStrike is particularly well-suited for supporting remote work.
• But you should take a moment to understand the opportunity that they provide.
• And, according to the firm Cybersecurity Ventures, cumulative global spending on cybersecurity products and services will climb to $1.75 trillion between 2021 and 2025.
• While the conflict stands to benefit companies that rely largely on defense work, shares of cybersecurity software companies have also risen on expectations of increased spending on security-related services.

You can start by reading news articles, industry reports and company earnings reports to understand the industry’s overall performance. Ultimately, the choice of investment method depends on an individual’s investment goals, risk tolerance and personal preferences. Regardless of the method chosen, investing in the cybersecurity industry can provide opportunities for growth because some of the top-rated tech stocks on Marketbeat are cybersecurity-related. Cloud security refers to the practices and technologies designed to protect cloud computing environments and their data and applications. Cloud security measures are necessary because data in the cloud can be vulnerable to a wide range of cyber threats, including data breaches, unauthorized access, data loss or leakage and malware attacks.

Conclusion: Don’t Let Short-Term Performance Point You Away from Cybersecurity

Specifically, the company was able to link these attacks to groups in China. These new cyberattacks are flying under the radar due to the complexity of their techniques. Mandiant believes that the extent of these attacks is far greater than what it currently knows. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks.

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In our opinion, the decreased valuations that we see now compared to one year ago could be a more interesting point of entry for anyone with a longer-term thesis on this important theme. If people are interested in a specific strategy that incorporates a focus on the specific themes mentioned in this piece, the WisdomTree Cybersecurity Fund (WCBR) could be worth a further look. One of the most fun parts of any cybersecurity discussion is looking at these themes and seeing how they touch the world in which we live. However, it is a software development term, meaning that you think of security earlier in the software development process. This may be one way to mitigate the risk of unsecured code going out that could lead to “supply chain hacks,” like what we saw with Solar Winds a few years ago. These hacks are pernicious because the attacker gains access to a piece of software used by many customers.

It was included in the 2016 Online Trust Honor Roll in recognition of its high standard of consumer protection, responsible privacy practices, and data security. Identity management is a process that involves the management of the digital identities of users in an organization. It is an essential component of cybersecurity that focuses on establishing and maintaining secure access to systems, applications and data.

For example, its Essentials product is a lower cost and simpler version of the FireEye Global Threat Management platform and is targeted at smaller and mid-market companies. In addition, some CDNs offer security features such as web application firewalls (WAFs) and bot management to protect against malicious traffic and automated attacks. Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999. Analysts at Evercore ISI just raised its price target on PANW to $215 from $207, with an outperform rating. BMO Capital also just raised its target to $225 from $218, with an outperform rating on the stock, too.

Four Star Security Firms in Q1 2022 – Microsoft, Palo Alto Networks, CrowdStrike & Okta

Which underscores the pressure for consolidation and M&A in the space. That is almost assured with the fragmentation of companies and so many well-funded new entrants fighting for escape velocity. Now we filter the data even more and look at some of the companies that have moved in the survey over the past year and a half. The chart below shows the same two dimensional picture isolating Auth0, Okta, SailPoint, CrowdStrike, Zscaler, CyberArk, Fortinet and Cisco. In the case of Cisco and Splunk we think the answer would be a definitive yes.

In the third quarter, DDOG posted 61% year-over-year revenue growth to $437 million. Even its net loss improved, to a loss of $14 million from $40 million over the last year. In addition, the company has a net retention rate of more than 130%, which is unheard of with software companies. This was made possible by a successful adoption of its cloud offerings, with revenue continuing to grow into the fourth quarter, where it could exceed the $125 million mark, 4% higher than expectations.

In this context, several ways to invest in cybersecurity include cloud security, identity management, legacy security vendors, infrastructure monitoring and content delivery networks. Each solution offers unique benefits and can be essential to an organization’s cybersecurity strategy. Zscaler has seen outstanding success in recent years, with its revenue growth nothing short of impressive. In 2022, annual revenue reached a staggering $1.09 billion, a 62% increase from the year before. Recent quarterly results have shown that its growth train is unlikely to stop anytime soon.

Founded 20 years ago, Splunk (SPLK (opens in new tab), $89.26) is a pioneer of analyzing log data, which is information generated from IT systems like ERPs (enterprise resource planning). This has proven useful in detecting cybersecurity vulnerabilities in real-time. During the fourth quarter, revenues jumped by 33% year-over-year to $510 million and cash flows came to $76 million. Amid the rapid global spread of Covid-19, many companies instructed employees to work from home. That has increased demand for computer security products that support remote work.

Kurtz was impressed by the record number of customers providing at least $1 million to expand its ARR, further positioning the firm for incredible numbers ahead. “I try to target what I think are the best, most resilient, industries. Right now I got the China reopening trade, I have data networking, semiconductors but all about automobile and industrial applications, (and) cybersecurity.” However, the company has had to make tough transitions, such as migrating to the cloud. In the meantime, Splunk has been the target of shareholder activists.

Here are seven cybersecurity stocks to buy and hold for safe gains in the future. If you’re an investor who’s measuring your time horizon in years, perhaps even decades, now is a great time to look at cybersecurity stocks. Founded in 2007, Zscaler (ZS (opens in new tab), $110.25) is one of the early players in the cloud-based cybersecurity market. It is an alternative to the traditional approach to cybersecurity, which has focused on on-premise corporate networks. At the core of Fortinet (FTNT (opens in new tab), $64.27) is a comprehensive system to secure networks. The solutions include firewalls, intrusion prevention systems, data leak prevention, virtual private networks (VPNs) and secure web gateways.

This indicates that the company is efficiently allocating capital under its control to profitable investments. However, it ranks poorly in terms of its change in total liabilities to assets, in the 46th percentile. “Attacks continue to rise in frequency and are getting sophisticated,” said Tejas Dessai, AVP and research analyst at Global X. Zscaler got started with a software-as-a-service product designed for network protection in the modern cloud computing era, but it has since added new internet security and end-user monitoring products.

The grade is based on the statistical significance of its last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months. As is the case with many subscription-based businesses, customer retention is the name of the game. In its last earnings report, unveiled on December 1, 2022, Zscaler reported a 90% retention rate to go along with 80% gross margins and a free cash flow margin of 27%. However, PLTR is expected to generate strong revenue and earnings over the next five years. Still, this company’s revenue is stable because of its contracts with the U.S. government in general and the Department of Defense and the CIA in particular. The problem for many investors is that Palantir’s revenue from Washington is not a new story.

That was an increase of 54% from the same quarter in the previous year and a 12% increase from the prior quarter. Its earnings per share came in at 29 cents, which bested analysts average estimate of 26 cents. The importance of cybersecurity in today’s digital age cannot be overstated. As pointed out in one of our articles, cyberattacks are increasing across the globe. A report by Nasdaq shows that cyberattacks rose globally throughout 2020, relative to the levels seen in 2019 and 2018.

Security firms verify the identity of network users and limit access to applications. Meanwhile, CrowdStrike uses machine learning and a specialized database to detect malware on laptops, mobile phones and other devices that access corporate networks. In addition, many software companies are using artificial intelligence to get a competitive edge.