It’s only a matter of time before another large-scale cyberattack hits. That’s why we’re keeping an eye on some of the hottest cybersecurity stocks to own today.
Cities, hospitals, schools, businesses, small businesses, and even US government agencies are all vulnerable at this time. Even your information is not safe. Most personal information, bank details, social security numbers, child information. And just in case you think hackers can’t reach you, it’s already happened. It is projected to reach $10.5 trillion by 2025 (up from $3 trillion in 2015). That alone is reason enough for investors to turn to some of the hottest cybersecurity stocks on the market.
But none of us are quite ready. “Cybercrime costs include data damage and destruction, financial theft, lost productivity, theft of intellectual property, theft of personal and financial data, embezzlement, fraud, disruption of normal business operations after an attack, and forensic This includes investigations, data recovery and deletion, said Steve Morgan, founder of Cybersecurity Ventures.
According to Forbes, currently, a ThoughtLab survey found that about 41% of security executives believe their companies are unprepared. In another global survey, 82% of CIOs said their company’s software supply chain is vulnerable. Unfortunately, the world may never be fully prepared. But while we wait for the world to finally wake up, we can at least benefit from the story.
bug | Global X Cyber Security ETF | $22.85 |
hack | ETFMG Prime Cyber Security ETF | $46.23 |
PANW | Palo Alto Networks | $161.78 |
CRWDMore | cloud strike | $118.54 |
DDOG | data dog | $76.99 |
FTNT | Fortinet | $53.64 |
S. | sentinel one | $15.88 |
Global X Cybersecurity ETF (Bug)
One of the best ways to trade hot sectors is through Exchange Traded Funds (ETFs). Global X Cyber Security ETF (Nasdaq:bug). BUG not only offers greater versatility, but at a much lower cost. With a 0.50% expense ratio, the BUG ETF offers exposure to 27 holdings. This will benefit from the introduction of cybersecurity.
Some of its top holdings are: Fortinet (Nasdaq:FTNT), Palo Alto (Nasdaq:PANW), check point software (Nasdaq:CHKP), Octa (Nasdaq:OKTA) When Rapid7 (Nasdaq:RPD) to give some examples. With BUG, he can now buy 100 shares for $2,285, giving him a big touch on these names. Or you could buy 100 of his shares in PANW as an example and he would pay just over $16,000 for 1 of the same shares. In short, ETFs make sense.
PureFunds ISE Cyber Security ETF (HACK)
Another strong and oversold cybersecurity ETF to consider is PureFunds ISE Cyber Security ETF (New York Stock Exchange:hack). This ETF invests in cyber security solutions including hardware, software and services at an expense ratio of 0.60%. Some of its top holdings are: BAE Systems (OTCMKTS:Baizy), Raidos Holdings (New York Stock Exchange:LDOS), verisign (Nasdaq:VRSNMore), Cisco (Nasdaq:CSCOMore), Fortinet, Check Point Software, splunk (Nasdaq:SPLK). The HACK ETF didn’t see a spectacular rise in his 2022, but neither did most other stocks. Moreover, with growing and unstoppable cybersecurity threats, demand will only increase revenue.
Palo Alto Networks (PANW)
Palo Alto Networks is the pinnacle of the top cybersecurity stocks to buy. Strong demand continues to drive the company to strong earnings. The company outperformed earnings and sales in the first quarter, then raised its guidance for the full year.
Revenues of $1.56 billion increased 25% year over year, exceeding the company’s guidance range of $1.535 billion to $1.555 billion. Non-GAAP earnings were $266.4 million (83 cents), up from $170.3 million (0.55 cents) a year ago. PANW now expects annual revenue to fall in the range of $6.85 billion to $6.91 billion, up slightly from its previous revenue forecast range of $6.85 billion to $6.9 billion. Growth was driven by increased customer commitment to the company’s platform.
Analysts at Evercore ISI have raised their price target for PANW to $215 from $207, beating valuations. BMO Capital also just raised its target from $218 to $225, and the stock has also outperformed.
Crowd Strike (CRWD)
Investors should also pay attention cloud strike (Nasdaq:CRWDMore). Over the past few weeks, the company appears to have seen strong support, dropping from around $140 to $115. The company reported annual recurring revenue of $2.34 billion, up 54% year-on-year, but CEO George Kurtz said it was below expectations. A year ago his earnings were up 67%. The company also said it added 1,460 net subscription customers in the third quarter, down from 1,607 he had a year earlier.
However, although the numbers were not up to par, Morgan Stanley analysts believe the decline is a buying opportunity. As quoted by CNBC, the company said:
Daiwa Capital Markets analyst Stephen Bersey also raised his price target for CRWD to $181 a share. Analysts liked the quarterly results and cost control.
Data Dog (DDOG)
With a market capitalization of $24.4 billion, data dog (Nasdaq:DDOG) was not a great year either. Again, many companies didn’t. 2022 was the year of the train wreck. But especially he wants to use the weakness of his DDOG, the leader in the $62 billion “observability” market, as a buying opportunity.
After all, observability is essential. It helps provide insight into metrics, traces and logs for the enterprise. You can also determine when an attack occurred, understand what an attacker did inside your company, and help improve security in the future.
Even better, millionaires are investing in DDOG. For example, Stanley Druckenmiller has purchased approximately 790,000 shares in the last few months. Jim Simons’ Renaissance Technologies also bought approximately 331,000 shares. All of this is occurring as the company continues to grow. His DDOG revenue for the third quarter rose 61% year over year to his $437 million. Even the net loss improved, from $40 million last year he lost $14 million. Additionally, the company’s net retention rate is over his 130%, which is unheard of for a software company.
Fortinet (FTNT)
Fortinet is another leading cybersecurity company with strong growth. The company’s third-quarter revenue was his $1.15 billion, up 33% year-over-year. This was all driven by a 39% increase in product sales and a 28% increase in services revenue. EPS was up 65% to 33 cents and cash flow was up 20% to give him $395 million.
There’s a lot more to love about FTNT here. For example, once the FTNT software is installed, the customer continues to pay for ongoing software and services. The company has also invested in employee endpoint protection, which is essential for remote workers.
The company posted claims of $1.69 billion, which is midpoint in its guidance, but below Street’s estimate of $1.74 billion. While this is negative, billings are trending up about 30% year-over-year and are still very healthy.
Sentinel One (S)
sentinel one (New York Stock Exchange:S.) is another hot cybersecurity stock to buy and hold. We use artificial intelligence through the Singularity platform to provide protection to our customers. The platform, according to the company, provides the speed and reputation needed to defeat today’s evolving cyberthreats.
Even better, earnings and guidance are solid. Adjusted EPS for the third quarter was a loss of 16 cents on sales of $115.32 million. This far exceeded expectations of a 25-cent loss on $95.7 million in sales. This unexpected gain was driven by a 106% increase in revenue accelerated by the company’s adoption of cloud services. The company expects fourth quarter 2022 revenue to be approximately $125 million. He also expects full-year revenue to fall in the range of $420 million to $421 million, compared to the $416 million forecast.
As of the issuance date, Ian Cooper did not have any positions (directly or indirectly) in the securities mentioned. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.