- 08-05-2024
In the October 2024 quarter, Zscaler reported 26% quarter-over-quarter revenue growth on “strong sales execution.” Operating cash flow was $291.9 million and 53% of revenue. The GAAP loss per share shrank to $30.7 million from $46.1 million in the prior year period. Zscaler operates a cloud security platform sold to customers on a subscription basis. Customers operate in various sectors, including household and personal products, banking, transportation, hospitality and biotech.
- Its initial public offering (IPO) in June 2021 raised $1.2 billion in cash and valued the company at $10 billion, making SentinelOne’s IPO the largest ever for a cybersecurity company.
- This has made a difference for total revenue, which increased by 14% to $2.3 billion.
- They can design robust cybersecurity infrastructure by looking at a full company’s IT systems.
- Several analysts increased their price targets for RBRK shares in the last two weeks of November, indicating a generally bullish outlook on the company’s stock price.
- However, it’s still important to research an ETF, just as you’d research stocks, before buying.
Okta Business Overview
What’s more, Palo Alto has exceptional acumen across addressing various other cyber vulnerabilities, including solutions for software as a service (SaaS) platforms and internet of things (IoT) networks. Admittedly, though, for this relevance, investors are paying a bit of a premium, especially as the company’s financial and profitability strengths are middle of the road. Most of First Trust’s ETF holdings are mid- and large-cap stocks in the technology sector. Most of the stocks here are pure-play cybersecurity stocks, but many companies operate in complementary industries such as aerospace and defense. Three of the stocks mentioned above are in its top five holdings. The expense ratio is only 0.6%, and the dividend yield is 0.32%.
RBRK: Revenue Climbing, Path to Cash Positivity
Tenable has entered other categories like cloud-native application protection platform (CNAPP) solutions and cloud infrastructure entitlement management (CIEM). “The attached rate of Purple AI across all eligible endpoints doubled compared to Q2,” said Weingarten during SentinelOne’s fiscal 2025 third-quarter earnings call. “Purple is one of the fastest-growing solutions in SentinelOne’s history and will continue to drive meaningful growth into the future.”
He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. Admittedly, a 15% sales growth expectation doesn’t compare well to Okta’s history. Annual sales growth from fiscal years 2019 to 2023 ranged from 40% to 55%. Akamai sells to financial companies, video streaming companies, healthcare providers, retailers, pharmaceuticals and the U.S. military. Patrick Sanders has no position in any of the stocks mentioned.
Methodology Used For These Cybersecurity Stock Picks
However, the counterargument is the relevance of the identity and access management market, which is only projected to rise higher. CACI International is not just a cybersecurity play but a world-class information technology products, solutions, and services company. They provide information assurance, security, systems integration, reengineering, electronic commerce, and related services.
Sharma says, “With more than 660,000 customers, 1,285 global patents and 50-plus enterprise cybersecurity products, Fortinet commands a significant presence in the cybersecurity field. Another cloud-native security vendor, Zscaler (ZS -4.08%), works in tandem with endpoint security services to help keep data secure. The company has been increasing its sales at a rapid pace and is another of the largest pure-play cybersecurity stocks as measured by market cap. The stock sold off sharply in 2022, bounced back in 2023, and took another hit the next year. The roller coaster ride notwithstanding, Zscaler continues to deliver profitable revenue growth. Insider Monkey compiled a list of high growth cybersecurity stocks to buy.
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According to feedback from more than 3,500 cybersecurity and business leaders for IBM’s Cost of a Data Breach Report 2024, the average cost of a data breach is now $4.88 million. So it seems like cybersecurity costs will continue to increase. However, it’s still important to research an ETF, just as you’d research stocks, before buying. Check out a fund’s fees and holdings to make sure it’s a good match for your portfolio. The first is if the event in question pushes down a company’s expected future earnings to a point where it looks too expensive at its current price.
The remaining nine cybersecurity stocks were ordered by free cash flow (FCF) per share—highest to lowest—and the bottom three were dropped. FCF was calculated from each company’s most recent year-end financial releases as operating cash flow less capital expenditures or capex. Capex included purchases of property, plant and equipment and capitalized software costs. Its best-in-class hardware continues generating more revenue as many organizations turn to Fortinet for help building new data centers and 5G mobile networks.
It’s also easy to deploy to the millions of people working from home and the billions of machines connected to the internet. Cybersecurity capabilities for individuals, corporations, institutions and governments are a must. Threats keep becoming more sophisticated, requiring upgrades and additional offerings so investing in this industry seems like a solid bet. Year to date total return was 15.6% with a net expense ratio of 0.51%. Top holdings include Zscaler, Palo Alto Networks, CrowdStrike, Fortinet and Check Point Software. In addition, given the changes in the industry, it’s important to find companies that have well-regarded technology and innovation.
- The GAAP loss per share shrank to $30.7 million from $46.1 million in the prior year period.
- A key highlight is Fortinet’s nearly 18% net margin, which is up from its median metric of 10% during the past 10 years.
- While the company’s revenue growth has slowed recently, Rapid7 has also recently achieved GAAP profitability—a milestone in the cybersecurity space.
- Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
- Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.
As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Neither the author nor editor held positions in the aforementioned investments at the time of publication. In the third quarter 2024, Rapid7 grew sales 8% year-over-year, and produced FCF of $39 million. Learn how you can make money from the wave of seasoned companies innovating in AI and new AI tech companies. As a content delivery network (CDN), Akamai (AKAM -1.25%) ensures data securely arrives at its intended destination.
These add to the momentum of rising cyberattacks expected by analysts for this year. The cybersecurity industry is experiencing unprecedented growth, fueled by increasing cyber threats, the expansion of cloud computing, and the adoption of artificial intelligence (AI) in security measures. Rubrik’s share price fell after it reported earnings on June 5, but price targets moved up massively. On average, analysts boosted their price target on the stock by 26% after earnings. Analysts at Wells Fargo significantly influenced this, boosting their target by $45.
Should You Invest $1,000 in Zscaler Right Now?
The cloud-first approach of CrowdStrike has allowed it to take market share quickly with large enterprises and public institutions, and is now replicated by all the large cybersecurity companies. The company should also see its international business grow, with still 3/4th of the Global 2000 companies yet to enter the CrowdStrike ecosystem. Zscaler grew revenues by 23% last quarter, and its billings rose by 25%. When billings grow faster than revenue, it Cyber security stocks suggests that revenue growth may accelerate in the future, as billings are a key indicator of future revenue. The company is profitable on an adjusted basis and is moving strongly toward non-adjusted profitability.