Info@NationalCyberSecurity
Info@NationalCyberSecurity

3 Cybersecurity Stocks to Profit From the Rise in Digital Dangers | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #ransomware


While we celebrate grand innovations such as artificial intelligence, technology carries a dark side, which brings us to cybersecurity stocks to buy. As digitalization moves forward, so too will efforts to exploit vulnerabilities for personal or financial gain.

Indeed, AI may be the source of the next big challenge for defending against cyberattacks. Yes, generative AI can be deployed productively. But because of this potentiality, it’s also incredibly dangerous in the wrong hands. Cyber defenses may be getting smarter but so too are nefarious agents.

This war will never end. In that sense, these cybersecurity stocks to buy may enjoy an indefinitely long upside pathway.

Palo Alto Networks (PANW)

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Known for its global defense solutions in the connectivity space, Palo Alto Networks (NASDAQ:PANW) offers firewall appliances and software. One of its key products is Panorama, a security management solution for the global control of network security platforms as a virtual or a physical appliance. It also offers subscription services for threat prevention, malware and other digital attacks.

Unsurprisingly, Palo Alto is a consistently strong performer. In fiscal 2023, the company’s average positive earnings surprise came out to 15.5%. Of course, investors will be paying a premium for the privilege. Right now, shares trade at 13.9X trailing-year revenue. That’s steep although it must be said that during the quarter ended Jan. 31, 2024, this multiple rose to 16.21X.

For fiscal 2024, analysts are looking at earnings per share of $5.51 on revenue of $7.99 billion. That’s a major improvement over last year’s results of earnings of $4.44 per share on sales of $6.89 billion. With more fiscal expansion projected in the following year, PANW makes a solid case for cybersecurity stocks to buy.

Fortinet (FTNT)

The Fortinet logo on a wall

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Based in Sunnyvale, California, Fortinet (NASDAQ:FTNT) provides cybersecurity and convergence of networking and security solutions worldwide. Per its public profile, Fortinet offers secure networking solutions focusing on the convergence of networking and security. As well, it provides network firewalls and distributed firewalls. Since the start of the year, FTNT only gained less than 1%, which may beg a contrarian take.

Over the past four quarters ending in the first quarter, Fortinet’s average positive earnings surprise came in at 14.38%. Its best performance during this period was in Q4, when it posted EPS of 51 cents against an expected print of 43 cents. To be fair, FTNT trades at a hot multiple of 8.43X trailing-year revenue. However, this metric hit 12.77X at the end of Q2 2023.

For the current fiscal year, experts are projecting EPS of $1.77 on revenue of $5.8 billion. That’s a solid improvement over last year’s results of earnings of $1.63 per share on sales of $5.3 billion. Further, fiscal 2025 calls for EPS of $1.96 and a top line of $6.54 billion. It’s another good idea for cybersecurity stocks to buy.

CyberArk Software (CYBR)

Cyberark (CYBR) logo on a corporate building

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Hailing from Israel, CyberArk Software (NASDAQ:CYBR) develops, markets, and sells software-based identity security solutions and services in the U.S., Europe, the Middle East and other international markets. One of its top products is Privileged Access Manager, which offers risk-based credential security and access management. Since the start of the year, CYBR stock gained 8% of equity value.

While CyberArk doesn’t have the same name recognition as the other cybersecurity stocks to buy, it can more than hold its own. Indeed, over the past four quarters, the company’s average positive earnings surprise clocked in at nearly 112%. Its best performance during this period was in Q1 2024, when it delivered EPS of 75 cents against an expected 28 cents.

To be sure, CYBR stock is hot, carrying a trailing-year revenue multiple of 12.46X. Here’s the thing. In fiscal 2024, EPS could reach $2.01 on revenue of $934.47 million. Last year, CyberArk posted earnings of $1.12 per share on revenue of $751.89 million. And in the following year, it could ring up $1.14 billion on the top line.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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