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3 Stocks Investors Should Consider Amid Potential Cyberattacks
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Yesterday, the market gave investors a small sigh of relief. Soaring oil prices dropped and many stocks closed in the green for what felt like the first time in a while. While yesterday’s price action was favorable, a one-day relief rally is not enough to sustain a turnaround just yet, so investors should heed caution.
A growing concern from the conflict in Ukraine growing is cybersecurity. As the war evolves and continues, some believe Russia may attempt to pressure the U.S to ease sanctions by disrupting financial systems and other key technology infrastructure through cyberattacks.
Nothing has happened yet, but cyberattacks have been an increasingly common way to attack and cripple network infrastructures during the digital shift, causing the industry to become a top priority for many companies and individuals.
Let’s take a look at three cybersecurity stocks - Mandiant , CrowdStrike (CRWD - Free Report) , and Palo Alto Networks (PANW - Free Report) - and analyze if this booming industry is worth adding to your portfolio.
Mandiant
Mandiant, a pioneer in the cybersecurity space, has recently been acquired by Alphabet (GOOGL) in a deal valued at $5.4 billion. The acquisition was met with little surprise as many companies have increasingly poured money into cybersecurity.
Year-to-date, Mandiant’s valuation has increased by nearly 25%. Shares skyrocketed 12% on the day of the acquisition announcement, signaling the deal brings major potential upside and was received well by market participants. The company’s year-to-date return is enough to outpace Zacks Software-Services Market Industry’s return of -18.2% and the S&P 500’s return of -10% over the same time period.
Mandiant has been delivering unparalleled frontline expertise and threat intelligence services throughout its history and currently responds to thousands of security breaches each year. The company is expecting to capitalize on Google’s enormous cloud, further propelling revenue from its services. Sales for the company in Q4 were $133 million, topping the $132 million estimate and representing an increase of 21% from Q4 2020. Mandiant’s annualized recurring revenue saw an increase of 23% from the end of Q4 2020.
The cybersecurity pioneer has managed to beat out earnings estimates consistently, tallying an average surprise of 46.3% during this time. The consensus estimate trend for FY22 has increased nearly 12% over the last 60 days, forecasting a $0.37 per share loss, up from the previously forecasted EPS value of -$0.42.
Image Source: Zacks Investment Research
Mandiant has a Value Style Score of F, a Growth Style Score of F, and a Momentum Style Score of B. Its overall VGM Score is an F and is a Zacks Rank #3 (Hold).
CrowdStrike
CrowdStrike provides cloud-delivery endpoint protection for its customers, shielding them against cyberattacks on or off the network. CRWD is responsible for creating the first multi-tenant, cloud-native, intelligent security solution capable of protecting workloads across all areas.
The company’s share price has decreased 6% year-to-date, but CRWD surged 12.5% today following the release of Q4 earnings, with the stock nearly touching $200. Wednesday’s closing price for the stock was $170.
Image Source: Zacks Investment Research
CrowdStrike benefits greatly from its annual recurring revenue, a very sticky part of its business. Annual recurring revenue for the cybersecurity firm grew 65% year over year to $1.7 billion, and quarterly sales of $431 million topped the $412 million estimate by 4.5%. The company attributes its record-breaking sales numbers to the expansion of its cloud and its identity protection services.
CrowdStrike has beat earnings estimates in each of its last four quarters. In its Q4 report, the company earned $0.30 a share, beating the estimate of $0.20 per share, the average surprise for the cybersecurity firm over this time has been a solid 52%. The consensus estimate trend for FY23 has increased by two cents to $0.93 per share, and for FY24, it has increased by two cents as well, up to $1.44 per share from the $1.42 per share estimate.
CRWD has a Value Style Score of F, a Growth Style Score of A, and a Momentum Style Score of C. Its overall VGM Score is a C and is a Zacks Rank #2 (Buy).
Palo Alto Networks
Palo Alto Networks is a California-based cybersecurity company that provides network security solutions to a wide segment of customers including enterprises, service providers, and government entities. It operates a three-platform strategy: network transformation, cloud-native security, and security operation center automation.
Shares of the company reached an all-time high of nearly $600 in the first week of March, but have declined to around $550 per share as of today. The company’s -0.9% year-to-date return is enough to outpace Zacks Software-Services Market Industry’s return of -18.2%.
Image Source: Zacks Investment Research
PANW claims its success has been driven by strong IT demand, the ever-evolving threat landscape, and its focus on execution at scale. In its quarterly report in February, the company posted quarterly sales of $1.3 billion, enough to beat the $1.28 billion estimate by nearly 3%. Annual revenue for the company also saw a nice bump, increasing 25% year-over-year. During Q3, PANW is looking to maintain its accelerated revenue growth and remains focused on customer fulfillment.
Earnings reports for the company have been consistent over the last four quarters, posting an average surprise of 7.2%. In Q2, PANW managed to beat out estimates by nine cents a share, reporting an EPS of $1.74. The consensus estimate trend has seen modest increases over the last 60 days, raising the FY22 EPS outlook to $7.30 a share and FY23 EPS to $9.07.
PANW has a Value Style Score of D, a Growth Style Score of B, and a Momentum Style Score of D. Its overall VGM Score is a C and is a Zacks Rank #3 (Hold).
Bottom Line
The cybersecurity industry has been rapidly evolving into a necessity for businesses and individuals alike. Corporations, individuals, and government entities have all shown strong demand for these types of services as the digital world expands.
Additionally, it seems safe to say there will be an ever-expanding number of hackers constantly trying to attack these companies and individuals for precious information, further propelling these names.
MNDT, CRWD, and PANW are three cybersecurity stocks that I believe have had a strong recent performance with consistent earnings beats paired with appealing announcements. Investors should take a look at these three names if trying to capitalize on the potential turmoil of a Russian cyber-attack.
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3 Stocks Investors Should Consider Amid Potential Cyberattacks
Yesterday, the market gave investors a small sigh of relief. Soaring oil prices dropped and many stocks closed in the green for what felt like the first time in a while. While yesterday’s price action was favorable, a one-day relief rally is not enough to sustain a turnaround just yet, so investors should heed caution.
A growing concern from the conflict in Ukraine growing is cybersecurity. As the war evolves and continues, some believe Russia may attempt to pressure the U.S to ease sanctions by disrupting financial systems and other key technology infrastructure through cyberattacks.
Nothing has happened yet, but cyberattacks have been an increasingly common way to attack and cripple network infrastructures during the digital shift, causing the industry to become a top priority for many companies and individuals.
Let’s take a look at three cybersecurity stocks - Mandiant , CrowdStrike (CRWD - Free Report) , and Palo Alto Networks (PANW - Free Report) - and analyze if this booming industry is worth adding to your portfolio.
Mandiant
Mandiant, a pioneer in the cybersecurity space, has recently been acquired by Alphabet (GOOGL) in a deal valued at $5.4 billion. The acquisition was met with little surprise as many companies have increasingly poured money into cybersecurity.
Year-to-date, Mandiant’s valuation has increased by nearly 25%. Shares skyrocketed 12% on the day of the acquisition announcement, signaling the deal brings major potential upside and was received well by market participants. The company’s year-to-date return is enough to outpace Zacks Software-Services Market Industry’s return of -18.2% and the S&P 500’s return of -10% over the same time period.
Mandiant has been delivering unparalleled frontline expertise and threat intelligence services throughout its history and currently responds to thousands of security breaches each year. The company is expecting to capitalize on Google’s enormous cloud, further propelling revenue from its services. Sales for the company in Q4 were $133 million, topping the $132 million estimate and representing an increase of 21% from Q4 2020. Mandiant’s annualized recurring revenue saw an increase of 23% from the end of Q4 2020.
The cybersecurity pioneer has managed to beat out earnings estimates consistently, tallying an average surprise of 46.3% during this time. The consensus estimate trend for FY22 has increased nearly 12% over the last 60 days, forecasting a $0.37 per share loss, up from the previously forecasted EPS value of -$0.42.
Image Source: Zacks Investment Research
Mandiant has a Value Style Score of F, a Growth Style Score of F, and a Momentum Style Score of B. Its overall VGM Score is an F and is a Zacks Rank #3 (Hold).
CrowdStrike
CrowdStrike provides cloud-delivery endpoint protection for its customers, shielding them against cyberattacks on or off the network. CRWD is responsible for creating the first multi-tenant, cloud-native, intelligent security solution capable of protecting workloads across all areas.
The company’s share price has decreased 6% year-to-date, but CRWD surged 12.5% today following the release of Q4 earnings, with the stock nearly touching $200. Wednesday’s closing price for the stock was $170.
Image Source: Zacks Investment Research
CrowdStrike benefits greatly from its annual recurring revenue, a very sticky part of its business. Annual recurring revenue for the cybersecurity firm grew 65% year over year to $1.7 billion, and quarterly sales of $431 million topped the $412 million estimate by 4.5%. The company attributes its record-breaking sales numbers to the expansion of its cloud and its identity protection services.
CrowdStrike has beat earnings estimates in each of its last four quarters. In its Q4 report, the company earned $0.30 a share, beating the estimate of $0.20 per share, the average surprise for the cybersecurity firm over this time has been a solid 52%. The consensus estimate trend for FY23 has increased by two cents to $0.93 per share, and for FY24, it has increased by two cents as well, up to $1.44 per share from the $1.42 per share estimate.
CRWD has a Value Style Score of F, a Growth Style Score of A, and a Momentum Style Score of C. Its overall VGM Score is a C and is a Zacks Rank #2 (Buy).
Palo Alto Networks
Palo Alto Networks is a California-based cybersecurity company that provides network security solutions to a wide segment of customers including enterprises, service providers, and government entities. It operates a three-platform strategy: network transformation, cloud-native security, and security operation center automation.
Shares of the company reached an all-time high of nearly $600 in the first week of March, but have declined to around $550 per share as of today. The company’s -0.9% year-to-date return is enough to outpace Zacks Software-Services Market Industry’s return of -18.2%.
Image Source: Zacks Investment Research
PANW claims its success has been driven by strong IT demand, the ever-evolving threat landscape, and its focus on execution at scale. In its quarterly report in February, the company posted quarterly sales of $1.3 billion, enough to beat the $1.28 billion estimate by nearly 3%. Annual revenue for the company also saw a nice bump, increasing 25% year-over-year. During Q3, PANW is looking to maintain its accelerated revenue growth and remains focused on customer fulfillment.
Earnings reports for the company have been consistent over the last four quarters, posting an average surprise of 7.2%. In Q2, PANW managed to beat out estimates by nine cents a share, reporting an EPS of $1.74. The consensus estimate trend has seen modest increases over the last 60 days, raising the FY22 EPS outlook to $7.30 a share and FY23 EPS to $9.07.
PANW has a Value Style Score of D, a Growth Style Score of B, and a Momentum Style Score of D. Its overall VGM Score is a C and is a Zacks Rank #3 (Hold).
Bottom Line
The cybersecurity industry has been rapidly evolving into a necessity for businesses and individuals alike. Corporations, individuals, and government entities have all shown strong demand for these types of services as the digital world expands.
Additionally, it seems safe to say there will be an ever-expanding number of hackers constantly trying to attack these companies and individuals for precious information, further propelling these names.
MNDT, CRWD, and PANW are three cybersecurity stocks that I believe have had a strong recent performance with consistent earnings beats paired with appealing announcements. Investors should take a look at these three names if trying to capitalize on the potential turmoil of a Russian cyber-attack.