The tech-heavy Nasdaq Composite is off 4.6% in the past three months while the broader technology ETF (
XLK Quick Quote XLK - Free Report) has lost 1.3% and ETFMG Prime Cyber Security ETFMG Prime Cyber Security Fund ( HACK Quick Quote HACK - Free Report) has retreated 0.7%. While rising rates have dealt a blow to the tech ETFs this year, we expect the pain over the space to lessen in 2023 as the Fed is likely to slow the rate hike pace.
Among the many corners in the tech space, we expect one area – cybersecurity – to emerge winner in the group. The latest earnings picture gives the cues.
Earnings in Detail
Earnings reports from
CrowdStrike ( CRWD Quick Quote CRWD - Free Report) and SentinelOne ( S Quick Quote S - Free Report) pleasantly surprised Wall Street lately. CrowdStrike Holdings reported third-quarter fiscal 2023 non-GAAP earnings of 40 cents per share, beating the Zacks Consensus Estimate of 32 cents. CrowdStrike’s fiscal third-quarter revenues of $580.9 million surged 53% year over year and surpassed the consensus mark of $574.7 million.
SentinelOne came out with a quarterly loss of $0.16 per share versus the Zacks Consensus Estimate of a loss of $0.22. The company posted revenues of $115.32 million for the quarter ended October 2022, surpassing the Zacks Consensus Estimate by 3.93%. Both companies that are targeted at offering protection to many devices attached to corporate networks, raised their guidance too.
Okta Inc. ( OKTA Quick Quote OKTA - Free Report) reported breakeven earnings in third-quarter fiscal 2023, beating the Zacks Consensus Estimate by 100%. Total revenues increased 37.2% year over year to $481 million and surpassed the consensus mark by 3.76%. Splunk Inc. ( SPLK Quick Quote SPLK - Free Report) reported solid third-quarter fiscal 2023 results (ended Oct 31, 2022), beating both the bottom-line and top-line estimates driven by healthy demand trends. Non-GAAP income in the reported quarter was 83 cents per share, which beat the Zacks Consensus Estimate by 60 cents. Total revenues in third-quarter fiscal 2023 improved to $929.8 million, beating the consensus estimate of $846 million.
Palo Alto Networks ( PANW Quick Quote PANW - Free Report) reported non-GAAP earnings of 83 cents per share, beating the Zacks Consensus Estimate of 68 cents. Palo Alto’s fiscal first-quarter revenues of $1.56 billion surpassed the Zacks Consensus Estimate of $1.55 billion. PANW is up 19.5% past month.
Cisco Systems ( CSCO Quick Quote CSCO - Free Report) reported first-quarter fiscal 2023 non-GAAP earnings of 86 cents per share, which beat the Zacks Consensus Estimate by 2.38%. Revenues increased 5.7% year over year to $13.63 billion and beat the consensus mark by 2.32%.
Across the security landscape, vendors are busy providing tools to big companies concerned about susceptibilities that have arisen due to the remote work and hybrid concept and an increase in cyber-attacks due to Russia-Ukraine war,
Against this backdrop, below we highlight a few cybersecurity ETFs that should be tracked for gains in the coming days.
ETFs in Focus ETFMG Prime Cyber Security ETFMG Prime Cyber Security Fund (– Up 7.3% Past Month HACK Quick Quote HACK - Free Report) WisdomTree Cybersecurity Fund (– Up 7.1% Past Month WCBR Quick Quote WCBR - Free Report) First Trust NASDAQ Cybersecurity ETF (– Up 6.7% Past Month CIBR Quick Quote CIBR - Free Report) iShares Cybersecurity & Tech ETF ( IHAK Quick Quote IHAK - Free Report) – Up 5.5% Past Month Global X Cybersecurity ETF ( BUG Quick Quote BUG - Free Report) – Up 5.4% Past Month