However, he described two ways in which a bad-news event such as an outage can push down a stock’s price in the long term. However, analyst Adam Borg of Stifel Nicolaus is cautious about Rapid7’s growth prospects. Borg says the vulnerability management niche within cybersecurity may not provide the growth investors want to see from Rapid7. Despite Borg’s opinion, the average analyst earnings outlook for Rapid7 is positive.
So far, 1,250 of its top 5,000 customers have migrated to one of its platforms, with a target of 2,500 to 3,500 by 2030. On the other hand, as AI technology advances, concerns around data privacy and risk management are escalating for individuals and businesses alike. Okta provides identity verification and cloud security certification with 99.99% uptime through its Okta Identity Platform. This is a growing field, especially with so many activities moving to the cloud, and remote or hybrid work becoming a new business model. Together with the other major cybersecurity firms, Fortinet is likely to benefit from the trend of consolidating multiple disparate cybersecurity solutions into a unified platform.
Fortinet Inc. (NASDAQ: FTNT)
The company is best known for its gateway service that allows authenticated users to access multiple applications with one login. Customers include more than half of Fortune 100 companies plus thousands of other organizations. Zscaler says its inline security cloud platform is the world’s largest. The company launched in 2007 and has since produced impressive year-over-year sales growth. In the past three years, sales grew an average of 48% annually. This fast-changing environment creates opportunities for the best cybersecurity stocks to thrive.
How do major glitches and cyberattacks affect cybersecurity stocks?
- On the other hand, as AI technology advances, concerns around data privacy and risk management are escalating for individuals and businesses alike.
- Managing fewer vendors decreases internal operational costs and also opens the potential for negotiation of discounts.
- Overall, these three cybersecurity names are driving impressive business results.
So when you’re buying Broadcom stock, you’re getting a major computing company that has a hand in cybersecurity. That gives it multiple revenue streams that are attractive to investors. Otherwise known as Big Blue, IBM is probably better known as a computer company, popularizing the personal computer back in the 1980s.
That growth benefits Datadog, which has a strong market position in cloud security. The company’s platform also integrates with OpenAI so customers can track the usage and performance of their AI-based applications. Akamai Technologies provides cloud computing, content delivery and cybersecurity solutions. Application and API security, bot and abuse protection, infrastructure security and programs supporting a zero-trust strategy are part of the offering. A zero-trust security strategy assumes breach is possible within networks and verifies every transaction accordingly.
Cybersecurity Stocks to Buy Now
With the amount of data traveling across the internet steadily on the rise, CDNs are becoming increasingly important.
Top Cybersecurity Stocks To Watch
Zscaler (ZS -4.08%) is leading the charge in zero-trust security, which is becoming a critical part of cybersecurity. Its Zscaler Private Access solution is helping organizations move away from outdated VPNs, including in the federal government. Meanwhile, its Zscaler Digital Experience, Zero Trust for Branch and Cloud, and AI-powered analytics are gaining traction. Last quarter, its revenue grew 23% year over year, driven by strong customer upsells and a net dollar retention rate of 114%. Fortinet is one of the largest cybersecurity companies, offering integrated solutions to enterprises and SMEs.
The company has also tweaked its go-to-market strategy by adopting a “hunter-farmer” sales model, where some sales reps focus on acquiring new customers and others on expanding existing accounts. With identity security becoming more important with the advent of AI agents, Okta looks poised to succeed. Palo Alto Networks (PANW -3.89%) is in the midst of a major transformation. Last year, it introduced what it called a “platformization” strategy, where instead of selling endpoint solution products, it decided to try and consolidate its customers onto one of its three platforms. To accelerate adoption, it gave away some services for free to lure customers off point solutions from different vendors and onto a unified platform.
- Booz Allen Hamilton Holding Corp. is another technology and management consulting company similar to CACI.
- High-value customers are those with annual contract values over $100,000.
- This steady growth and market leadership helped make its stock one of the best performers among cybersecurity companies in the post-coronavirus era.
- The company is also highly profitable in terms of free cash flow.
- CrowdStrike (CRWD -2.94%) continues to be the leader in endpoint security, but it, too, has expanded its platform into other areas.
- In a recent interview with CNBC, Palo Alto Networks CEO Nikesh Arora called this a “perfect time” for security companies, pointing to an inflection point in enterprise adoption of AI.
Falcon Flex, its new flexible licensing model, is helping drive adoption of its various cybersecurity modules. With Falcon Flex, customers can deploy what cybersecurity solutions they need, when they need them. This is paying off, with the average Flex customer deal size now exceeding $1 million in annual Cyber security stocks recurring revenue.
Investing In Cybersecurity ETFs
CACI International also leads the value list (see more information about CACI in growth stocks). Over the past year, their price has only increased from 230 to 247 per share. Cybersecurity securities companies stocks will focus mainly on the hardware and software side of this process to ensure the safety of private users, a company’s, or even governmental data. As of December 5, analysts remain divided in their ratings of FTNT shares. About 40% suggest the stock is a Buy, while 58% have rated it a Hold.
According to a survey from the Identity Defined Security Alliance, about 90% of the respondents said they suffered a breach. This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits. In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap. Going forward, analysts expect high-single-digit sales growth for Akamai through 2028, with annual EPS in the range of about $6.50 to nearly $10. According to the Identity Theft Resource Center, the number of data breaches set a record in 2023, with the number of incidents jumping 71% from the previous high in 2021.
Varonis Systems, Inc. (NASDAQ:VRNS)
Working with channel partners—third-party technical companies providing other technical sales and consulting—the company sells subscriptions globally to its Falcon platform. There is good cash flow, with LFCF that has grown from next to nothing in 2019 to $728.5 million in its latest fiscal year, which ended January 2023. The company has been issuing new stock and financing to bring in more cash. There’s also heavy stock compensation ($526.5 million last fiscal year), but that is compared to a market capitalization of more than $35 billion, so about a 1.4% increase. Estimates of future revenue and profit growth suggest a move to profitability in the next year, with stock prices generally climbing since a relative low point in January 2023.
