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Cybersecurity ETFs Maintain Strength on Solid Q2 Earnings
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In the present digital world, the need for cybersecurity is growing by leaps and bounds. This is because digital transformation has increased the risk of security breaches and threats. In fact, we have seen years worth of digital transformation in a few months amid the pandemic. Solid earnings have added to the strength. Most of the cybersecurity firms came up with stronger-than-expected earnings, outpacing the Zacks Consensus Estimate for both earnings and revenues (read: Cybersecurity Stocks & ETFs for the Coronavirus Crisis).
Let’s check out the second-quarter results of some of the cyber security firms that have the largest allocation to the ETFs in this niche area of the technology sector:
Cybersecurity Earnings in Focus
Fortinet (FTNT - Free Report) posted earnings per share of 82 cents, easily topping the Zacks Consensus Estimate by 26.2% and improving significantly from the year-ago quarter’s 58 cents. Revenues rose 18% year over year to $615.5 million and were above the consensus mark of $598.3 million. The company projects revenues in the range of $630-$645 million and earnings per share of 76-78 cents for the third quarter.
FireEye reported earnings per share of 9 cents while the Zacks Consensus Estimate was pegged at a loss of 2 cents and the year-ago loss was of a penny. Revenues increased 6% year over year to $230 million and surpassed the consensus mark of $214.6 million. FireEye expects revenues of $225-$229 million and earnings per share of 6-8 cents for the third quarter. For the full year, the company raised its revenue guidance to $905-$925 million from $880-$900 million and earnings per share guidance to 22-26 cents, up from the previous projection of 3-7 cents (see: all the Technology ETFs here).
Proofpoint outpaced the Zacks Consensus Estimate by 30.8% for earnings and 2.2% for revenues. Earnings per share increased 24.4% from the year-ago quarter while revenues jumped 20.5%. For the third quarter, the company expects revenues in the range of $260-$262 million and earnings per share of 37-40 cents. For the full year, Proofpoint raised the guidance to $1.035-$1.037 billion from the previous projection of $1.005-$1.030 billion for revenues and $1.64-$1.70 from $1.41-$1.46 for earnings per share.
Check Point Software Technologies (CHKP - Free Report) posted earnings per share of $1.58, outpacing the Zacks Consensus Estimate by 11.27%, and revenues of $506 million, which also came above the consensus mark of $486 million. On a year-over-year basis, earnings grew 15% while revenues were up 4%. The company did not offer any guidance due to the COVID-19 pandemic.
CyberArk Software (CYBR - Free Report) outpaced the Zacks Consensus Estimate by 325% for earnings. Revenues of $106.5 million came in above the consensus mark of $101 million. Earnings per share were lower than the year-ago figure of 59 cents while revenues grew 6.3%. The company expects earnings per share of 19-33 cents and revenues of $107-$115 million for the third quarter.
ETFs in Focus
Given the string of earnings beat, ETFMG Prime Cyber Security ETF (HACK - Free Report) , First Trust NASDAQ CEA Cybersecurity ETF (CIBR - Free Report) and Global X Cybersecurity ETF (BUG - Free Report) have gained 2.3%, 0.8% and 0.9%, respectively, over the past 10 days. Below we have highlighted them in detail:
HACK in Focus
The fund provides global exposure to the cybersecurity industry comprising companies that offer hardware, software, consulting and services to defend against cybercrime. It tracks the Prime Cyber Defense Index, holding 58 securities in its basket. It is well spread out across components with the in-focus five firms accounting for nearly 3% share each. From an industrial look, software & IT services accounts for 90.1% of the portfolio while communication & networking, and aerospace & defense round off the next two. The fund has amassed $1.5 billion in AUM and charges 60 bps in fees per year. Volume is solid as it exchanges nearly 178,000 shares in hand per day (read: 5 ETF Areas Hitting Highs on Resurging Coronavirus Cases).
CIBR in Focus
This ETF has accumulated nearly $2.1 billion in its asset base and charges 60 bps in annual fees. It trades in a moderate average daily volume of around 455,000 shares. The fund follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. In total, the product holds 44 stocks in its basket with the in-focus firms accounting for around 3% share each.
BUG in Focus
This ETF offers exposure to the companies that stand to benefit from the increased adoption of cybersecurity technology and follows the Indxx Cybersecurity Index. It holds 29 stocks in its basket with the in-focus five firms accounting for a combined share of 22.7%. The ETF has accumulated $33.0 million in its asset base and trades in average daily volume of 30,000 shares (read: 6 ETF Trades to Forget Worst-Ever Q2 GDP Contraction).
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Cybersecurity ETFs Maintain Strength on Solid Q2 Earnings
In the present digital world, the need for cybersecurity is growing by leaps and bounds. This is because digital transformation has increased the risk of security breaches and threats. In fact, we have seen years worth of digital transformation in a few months amid the pandemic. Solid earnings have added to the strength. Most of the cybersecurity firms came up with stronger-than-expected earnings, outpacing the Zacks Consensus Estimate for both earnings and revenues (read: Cybersecurity Stocks & ETFs for the Coronavirus Crisis).
Let’s check out the second-quarter results of some of the cyber security firms that have the largest allocation to the ETFs in this niche area of the technology sector:
Cybersecurity Earnings in Focus
Fortinet (FTNT - Free Report) posted earnings per share of 82 cents, easily topping the Zacks Consensus Estimate by 26.2% and improving significantly from the year-ago quarter’s 58 cents. Revenues rose 18% year over year to $615.5 million and were above the consensus mark of $598.3 million. The company projects revenues in the range of $630-$645 million and earnings per share of 76-78 cents for the third quarter.
FireEye reported earnings per share of 9 cents while the Zacks Consensus Estimate was pegged at a loss of 2 cents and the year-ago loss was of a penny. Revenues increased 6% year over year to $230 million and surpassed the consensus mark of $214.6 million. FireEye expects revenues of $225-$229 million and earnings per share of 6-8 cents for the third quarter. For the full year, the company raised its revenue guidance to $905-$925 million from $880-$900 million and earnings per share guidance to 22-26 cents, up from the previous projection of 3-7 cents (see: all the Technology ETFs here).
Proofpoint outpaced the Zacks Consensus Estimate by 30.8% for earnings and 2.2% for revenues. Earnings per share increased 24.4% from the year-ago quarter while revenues jumped 20.5%. For the third quarter, the company expects revenues in the range of $260-$262 million and earnings per share of 37-40 cents. For the full year, Proofpoint raised the guidance to $1.035-$1.037 billion from the previous projection of $1.005-$1.030 billion for revenues and $1.64-$1.70 from $1.41-$1.46 for earnings per share.
Check Point Software Technologies (CHKP - Free Report) posted earnings per share of $1.58, outpacing the Zacks Consensus Estimate by 11.27%, and revenues of $506 million, which also came above the consensus mark of $486 million. On a year-over-year basis, earnings grew 15% while revenues were up 4%. The company did not offer any guidance due to the COVID-19 pandemic.
CyberArk Software (CYBR - Free Report) outpaced the Zacks Consensus Estimate by 325% for earnings. Revenues of $106.5 million came in above the consensus mark of $101 million. Earnings per share were lower than the year-ago figure of 59 cents while revenues grew 6.3%. The company expects earnings per share of 19-33 cents and revenues of $107-$115 million for the third quarter.
ETFs in Focus
Given the string of earnings beat, ETFMG Prime Cyber Security ETF (HACK - Free Report) , First Trust NASDAQ CEA Cybersecurity ETF (CIBR - Free Report) and Global X Cybersecurity ETF (BUG - Free Report) have gained 2.3%, 0.8% and 0.9%, respectively, over the past 10 days. Below we have highlighted them in detail:
HACK in Focus
The fund provides global exposure to the cybersecurity industry comprising companies that offer hardware, software, consulting and services to defend against cybercrime. It tracks the Prime Cyber Defense Index, holding 58 securities in its basket. It is well spread out across components with the in-focus five firms accounting for nearly 3% share each. From an industrial look, software & IT services accounts for 90.1% of the portfolio while communication & networking, and aerospace & defense round off the next two. The fund has amassed $1.5 billion in AUM and charges 60 bps in fees per year. Volume is solid as it exchanges nearly 178,000 shares in hand per day (read: 5 ETF Areas Hitting Highs on Resurging Coronavirus Cases).
CIBR in Focus
This ETF has accumulated nearly $2.1 billion in its asset base and charges 60 bps in annual fees. It trades in a moderate average daily volume of around 455,000 shares. The fund follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. In total, the product holds 44 stocks in its basket with the in-focus firms accounting for around 3% share each.
BUG in Focus
This ETF offers exposure to the companies that stand to benefit from the increased adoption of cybersecurity technology and follows the Indxx Cybersecurity Index. It holds 29 stocks in its basket with the in-focus five firms accounting for a combined share of 22.7%. The ETF has accumulated $33.0 million in its asset base and trades in average daily volume of 30,000 shares (read: 6 ETF Trades to Forget Worst-Ever Q2 GDP Contraction).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top n-ews and analysis, as well as top-performing ETFs, each week. Get it free >>