Tag: OKTA

Cybersecurity Under Siege: How Investors Can Profit

by Fred Fuld III

In an increasingly digital world, cybersecurity is more crucial than ever. High-profile cyberattacks have exposed vulnerabilities in businesses, government agencies, and even critical infrastructure. Recent breaches, such as the attack on MGM Resorts, which caused widespread operational disruptions, and the cyberattack on software provider Progress Software’s MOVEit file transfer tool, which affected thousands of companies worldwide, highlight the growing threats organizations face. Yale New Haven Health was hit recently, along with the city of Mission in Texas.

As cyber threats continue to evolve, companies specializing in cybersecurity have become indispensable, making cybersecurity stocks an attractive investment opportunity.

The demand for cybersecurity solutions is skyrocketing as businesses move their operations online and store sensitive data in the cloud. With artificial intelligence (AI) making cyberattacks more sophisticated, companies must constantly upgrade their security measures. This ongoing demand ensures that cybersecurity firms have strong growth potential, which is reflected in the stock performance of leading companies in the sector.

Several cybersecurity stocks have experienced a huge drop in the last three or four months, creating a potential buying opportunity at more favorable prices.

Among the top cybersecurity stocks worth considering, Okta (OKTA) stands out for its expertise in identity and access management. As more businesses shift to remote work, Okta’s services ensure that only authorized users can access company networks, making it a critical security player.

This $19.5 billion market cap company has a nosebleed high trailing price to earnings ratio of almost 2000, however, the forward P/E is much more favorable at 32. Earnings per share growth year-over-year were up 107%, on a sales growth of 15.3%. Earnings per share are expected to grow another 10.3% next year.

Datadog (DDOG) specializes in monitoring and analytics for cloud environments. Its platform provides real-time insights into security threats, helping organizations detect and respond to attacks quickly. As cloud adoption accelerates, Datadog’s security capabilities make it an essential tool for businesses.

This is a $35 billion market cap company that trades at 198 times trailing earnings and 48 times forward earnings. Earnings per share growth year-over-year were up 274%, on a sales growth of 26%. Earnings per share are expected to grow another 23% next year.

Akamai Technologies (AKAM) is a leader in content delivery and cloud security. Its services help protect websites and applications from cyber threats, including distributed denial-of-service (DDoS) attacks. Given the increase in cyberattacks on web applications, Akamai’s security solutions are in high demand.

Akamai has a market cap of $12 billion. It trades at 25 times trailing earnings and 12 times forward earnings. Earnings per share year-over-year were down, on a sales growth of 4.7%.

Rapid7 (RPD) provides vulnerability management and security analytics to help companies identify weaknesses in their systems before hackers can exploit them. With the rise of ransomware and zero-day vulnerabilities, Rapid7’s proactive security approach is essential for businesses looking to stay ahead of threats.

This is a $1.79 billion market cap company with a trailing P/E of 70 and a forward P/E of 14. Earning per share are expected to grow by 9.3% next year.

Because of the demand, the cybersecurity field is becoming crowded with many publicly created companies to choose from, including Palo Alto Networks (PANW), SentinelOne (S), Sailpoint (SAIL), Qualys (QLYS), Zscaler (ZS), Elastic (ESTC), Tenable (TENB), Check Point Software (CHKP), Fortinet (FTNT), and many, many more.

With cyberattacks becoming more frequent and severe, businesses and governments have no choice but to invest heavily in cybersecurity. This necessity creates a strong, long-term growth outlook for cybersecurity companies. For investors looking to capitalize on this trend, cybersecurity stocks may offer a compelling opportunity for solid returns.

Disclosure: The author didn’t own any of the above at the time the article was written.

Have You Made Your Portfolio Safe with Cybersecurity Stocks?

by Fred Fuld III

Cybersecurity is becoming an increasingly important issue in our interconnected world, and as a result, the future business potential of cybersecurity is significant. Here are a few reasons why:

  1. Growing need for cybersecurity: As more and more of our personal and business lives move online, the need for robust cybersecurity measures will only increase. With cyber attacks becoming more sophisticated and frequent, companies will have to invest in cybersecurity solutions to protect their data and infrastructure.
  2. Compliance regulations: Governments around the world are introducing new regulations to ensure companies are taking adequate measures to protect their customers’ data. For example, the European Union’s General Data Protection Regulation (GDPR) and California’s Consumer Privacy Act (CCPA) both require companies to take steps to protect consumer data. This means that companies will need to invest in cybersecurity solutions to comply with these regulations.
  3. Increased spending on cybersecurity: According to a report by Cybersecurity Ventures, global spending on cybersecurity products and services is expected to exceed $1 trillion over the next five years. This represents a significant growth opportunity for cybersecurity companies and service providers.
  4. Cybersecurity skills shortage: There is currently a shortage of cybersecurity professionals, which means that companies are struggling to find and hire qualified individuals to help protect their networks and data. This presents an opportunity for companies to invest in training and developing their own cybersecurity teams, or partnering with third-party providers to fill the gap.

Overall, the future business potential of cybersecurity is significant, with increasing demand for cybersecurity solutions and a growing market for cybersecurity products and services. Companies that invest in cybersecurity now will be well-positioned to capitalize on this trend in the years to come.

So how does an investor play this market?

The following is a selection of the many stocks involved in cybersecurity:

CompanySymbolMarket CapP/EFwd P/E
Palo Alto NetworksPANW$56 B244040
FortinetFTNT$47 B5737
CrowdStrike HoldingsCRWD$29 B64
ZscalerZS$19 B62
PalantirPLTR$17 B35
OktaOKTA$13 B75
SentinelOneS$4 B
If a section is blank, it means negative earnings

Th largest by market capitalization is Palo Alto Networks, which is based in Santa Clara, California and has been around since 2005.

The stock has a nosebleed high trailing price to earnings ratio of 2440, but a more reasonable forward P/E of 40.

Earnings per share growth this year was 47.6%, and next year anticipated to be 16.25%. Quarterly earnings growth year-over-year was 180%.

The next largest is Fortinet, based in Sunnyvale, California. It trades at 57 times trailing earnings and 37 times forward earnings. Earnings per share this year jumped 46.6%.

Quarterly revenue growth year-over-year was up 33%. The company is debt free.

Hopefully one of these stocks can protect your portfolio.

Disclosure: Author owns PLTR.

20 Cybersecurity Stocks to Choose From

Doesn’t it seem like there is a  cybersecurity attack on a company almost every day? Because hacking and cyber attacks are such a big issue, the Securities and Exchange Commission issued stronger guidelines last year to to publicly traded companies regarding cybersecurity. The Equifax issue didn’t help.

Consumers are now worried about the Dark Web, which is a concealed Internet where supposedly anyone can buy any of the four H’s: heroin, hitmen, hackers, and harlots. The big money is in the marketing of email addresses, Social Security numbers, credit card numbers and other personal data.

Fortunately, there are companies that are working hard to prevent attacks on businesses and consumers.  There are 20 publicly traded companies that are involved in cybersecurity.

One of the biggest players in the industry is California based Symantec (SYMC), a cybersecurity provider for consumer and enterprise customers, which was founded in 1982. The stock has a trailing price to earnings ratio of 85 and a forward P/E of 13. It even pays a dividend of 1.3%. It has a market cap of $14.7 billion.

Another large cybersecurity firm is Palo Alto Networks (PANW), a California based company founded in 2012. The company provides network and endpoint cybersecurity solutions. The stock trades at 48 times forward earnings, however, earnings for the past few years have been negative. The market cap is $22.8 billion.

TRIVIA: 50% OF ALL PUBLICLY TRADED CYBERSECURITY COMPANIES ARE BASED IN CALIFORNIA

Checkpoint (CHKP) is an Israeli based network security company. The stock has a trailing price to earnings ratio of 24 and a forward P/E of 20. It does not pay a dividend.

There are several other smaller security companies to choose from including Tenable Holdings, Inc. (TENB), Okta, Inc. (OKTA), Carbon Black, Inc. (CBLK), and Zscaler, Inc. (ZS)

If you aren’t sure which cyber security stock to buy, maybe you should consider a cyber security ETF.  There are a couple to choose from, the ETFMG Prime Cyber Security ETF (HACK) and the First Trust NASDAQ Cybersecurity ETF (CIBR).

For a list of about 20 cybersecurity stocks, click HERE to access the stock list page.

Disclosure: Author didn’t own any of the above at the time the article was written.