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4 Stocks to Ride on a Challenging Security Landscape in 2024
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In an era dominated by technological advancements, the digital landscape has become both the cornerstone of progress and the battleground for security threats. As we delve deeper into the digital age, the complexities of cybersecurity challenges continue to escalate, posing significant hurdles for individuals, businesses and governments worldwide.
2024 ushers in a challenging security landscape marked by an evolving threat matrix that encompasses diverse cyber risks, geopolitical tensions and the relentless advancement of technology. Cybercriminals, equipped with sophisticated tools and tactics, relentlessly target vulnerabilities across networks, data systems and critical infrastructure. Ransomware attacks, supply-chain vulnerabilities and the exploitation of zero-day vulnerabilities persist as prominent threats, causing widespread disruptions and financial losses.
The interconnectedness of the digital ecosystem further amplifies these challenges. Artificial intelligence, cloud adoption, the Internet of Things proliferation and the rapid expansion of remote work models have widened the attack surface, presenting a multifaceted challenge for cybersecurity professionals. Additionally, geopolitical tensions and state-sponsored cyber espionage activities continue to raise concerns, highlighting the intricate nexus between technology, security and global politics.
As the digital realm continues to expand and evolve, the role of cybersecurity in safeguarding sensitive information and critical infrastructure and ensuring digital resilience becomes increasingly critical. Amid these challenges lie opportunities for companies at the forefront of cybersecurity innovation to shine, offering investors a chance to ride the wave of a demanding security landscape in 2024.
Here, we have picked four stocks — Qualys, Inc. (QLYS - Free Report) , Okta, Inc. (OKTA - Free Report) , CrowdStrike Holdings, Inc. (CRWD - Free Report) and Datadog, Inc. (DDOG - Free Report) — that are strategically positioned to ride the waves of a challenging security landscape in 2024. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy).
The Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Additionally, per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 and a Growth Score of A or B offer solid investment opportunities.
Additionally, Gartner’s forecast for a substantial increase in corporate spending on cybersecurity next year also bodes well for these IT security solution providers. In 2024, Gartner predicts total spending on cybersecurity to reach an impressive $215 billion, up 14% from the 2023 estimated level of $188 billion.
Our Picks
Qualys is a provider of cloud security and compliance solutions that enable organizations to identify security risks to their information technology infrastructures and help protect their IT systems and applications from cyber-attacks. The stock currently sports a Zacks Rank #1 and has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Qualys is gaining from the surging demand for security and networking products amid the growing hybrid working trend. Accelerated digital transformations by organizations are also fueling the demand for the company’s cloud-based security solutions. QLYS’ solutions are provided through its QualysGuard Cloud Platform. QLYS offers products for vulnerability management, policy compliance, web application scanning, malware detection and associated security products.
The Zacks Consensus Estimate for 2023 earnings has been revised upward to $5.11 per share from $5.08 per share over the past 30 days, indicating a 37.4% increase from 2022.
Okta provides a wide range of identity and access and authentication solutions for small and medium-sized businesses, universities, non-profits and government agencies within the United States and abroad. The company’s secure and neutral cloud-based platform allows users to integrate with nearly any application, service or cloud.
Okta is likely to continue benefiting from the increased use cases of identity solutions. Okta Identity Cloud’s capability to consolidate and easily integrate existing applications without compromising security or stability is attracting customers. Okta products’ ability to automate processes, secure data and reduce costs has been an upside.
Expanding clientele has been a key catalyst. The company ended the third quarter of fiscal 2024 with 18,800 customers, adding 400 customers during the quarter despite the challenging macroeconomic environment. Customers with more than $100K in Annual Contract Value increased 17% year over year.
The stock carries a Zacks Rank #2 at present and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2024 earnings has been revised upward to $1.46 per share from $1.18 per share over the past 30 days, indicating a robust improvement from a loss of 4 cents in 2022. The long-term expected earnings growth rate for the stock is pegged at 38.2%.
CrowdStrike is a leader in next-generation endpoint protection, threat intelligence and cyberattack response services. The company is benefiting from the rising demand for cyber-security solutions due to a slew of data breaches and the increasing need for security and networking products amid the growing hybrid working trend.
Continued digital transformation and cloud migration strategies adopted by organizations are key growth drivers. The company’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions such as Bionic and Reposify are expected to fuel growth.
The stock currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2024 earnings has been revised upward by a penny in the past seven days to $2.94 per share, which calls for an increase of 90.9% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 36.1%.
Datadog is a monitoring and analytics platform for developers, IT operations teams and business users in the cloud age. The company’s business runs around its portfolio of more than 400 out-of-the-box integrations, including public cloud, private cloud, on-premise hardware, databases and third-party software.
The company is benefiting from customer additions and the increased adoption of its cloud-based monitoring and analytics platform, driven by accelerated digital transformation and cloud migration across organizations. Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver, along with an expanding portfolio.
The stock currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for 2023 earnings has been revised upward by a couple of cents in the past seven days to $1.53 per share, which calls for an increase of 56.1% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.5%.
Image: Bigstock
4 Stocks to Ride on a Challenging Security Landscape in 2024
In an era dominated by technological advancements, the digital landscape has become both the cornerstone of progress and the battleground for security threats. As we delve deeper into the digital age, the complexities of cybersecurity challenges continue to escalate, posing significant hurdles for individuals, businesses and governments worldwide.
2024 ushers in a challenging security landscape marked by an evolving threat matrix that encompasses diverse cyber risks, geopolitical tensions and the relentless advancement of technology. Cybercriminals, equipped with sophisticated tools and tactics, relentlessly target vulnerabilities across networks, data systems and critical infrastructure. Ransomware attacks, supply-chain vulnerabilities and the exploitation of zero-day vulnerabilities persist as prominent threats, causing widespread disruptions and financial losses.
The interconnectedness of the digital ecosystem further amplifies these challenges. Artificial intelligence, cloud adoption, the Internet of Things proliferation and the rapid expansion of remote work models have widened the attack surface, presenting a multifaceted challenge for cybersecurity professionals. Additionally, geopolitical tensions and state-sponsored cyber espionage activities continue to raise concerns, highlighting the intricate nexus between technology, security and global politics.
As the digital realm continues to expand and evolve, the role of cybersecurity in safeguarding sensitive information and critical infrastructure and ensuring digital resilience becomes increasingly critical. Amid these challenges lie opportunities for companies at the forefront of cybersecurity innovation to shine, offering investors a chance to ride the wave of a demanding security landscape in 2024.
Here, we have picked four stocks — Qualys, Inc. (QLYS - Free Report) , Okta, Inc. (OKTA - Free Report) , CrowdStrike Holdings, Inc. (CRWD - Free Report) and Datadog, Inc. (DDOG - Free Report) — that are strategically positioned to ride the waves of a challenging security landscape in 2024. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy).
The Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Additionally, per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 and a Growth Score of A or B offer solid investment opportunities.
Additionally, Gartner’s forecast for a substantial increase in corporate spending on cybersecurity next year also bodes well for these IT security solution providers. In 2024, Gartner predicts total spending on cybersecurity to reach an impressive $215 billion, up 14% from the 2023 estimated level of $188 billion.
Our Picks
Qualys is a provider of cloud security and compliance solutions that enable organizations to identify security risks to their information technology infrastructures and help protect their IT systems and applications from cyber-attacks. The stock currently sports a Zacks Rank #1 and has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Qualys is gaining from the surging demand for security and networking products amid the growing hybrid working trend. Accelerated digital transformations by organizations are also fueling the demand for the company’s cloud-based security solutions. QLYS’ solutions are provided through its QualysGuard Cloud Platform. QLYS offers products for vulnerability management, policy compliance, web application scanning, malware detection and associated security products.
The Zacks Consensus Estimate for 2023 earnings has been revised upward to $5.11 per share from $5.08 per share over the past 30 days, indicating a 37.4% increase from 2022.
Qualys, Inc. Price and Consensus
Qualys, Inc. price-consensus-chart | Qualys, Inc. Quote
Okta provides a wide range of identity and access and authentication solutions for small and medium-sized businesses, universities, non-profits and government agencies within the United States and abroad. The company’s secure and neutral cloud-based platform allows users to integrate with nearly any application, service or cloud.
Okta is likely to continue benefiting from the increased use cases of identity solutions. Okta Identity Cloud’s capability to consolidate and easily integrate existing applications without compromising security or stability is attracting customers. Okta products’ ability to automate processes, secure data and reduce costs has been an upside.
Expanding clientele has been a key catalyst. The company ended the third quarter of fiscal 2024 with 18,800 customers, adding 400 customers during the quarter despite the challenging macroeconomic environment. Customers with more than $100K in Annual Contract Value increased 17% year over year.
The stock carries a Zacks Rank #2 at present and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2024 earnings has been revised upward to $1.46 per share from $1.18 per share over the past 30 days, indicating a robust improvement from a loss of 4 cents in 2022. The long-term expected earnings growth rate for the stock is pegged at 38.2%.
Okta, Inc. Price and Consensus
Okta, Inc. price-consensus-chart | Okta, Inc. Quote
CrowdStrike is a leader in next-generation endpoint protection, threat intelligence and cyberattack response services. The company is benefiting from the rising demand for cyber-security solutions due to a slew of data breaches and the increasing need for security and networking products amid the growing hybrid working trend.
Continued digital transformation and cloud migration strategies adopted by organizations are key growth drivers. The company’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions such as Bionic and Reposify are expected to fuel growth.
The stock currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2024 earnings has been revised upward by a penny in the past seven days to $2.94 per share, which calls for an increase of 90.9% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 36.1%.
CrowdStrike Price and Consensus
CrowdStrike price-consensus-chart | CrowdStrike Quote
Datadog is a monitoring and analytics platform for developers, IT operations teams and business users in the cloud age. The company’s business runs around its portfolio of more than 400 out-of-the-box integrations, including public cloud, private cloud, on-premise hardware, databases and third-party software.
The company is benefiting from customer additions and the increased adoption of its cloud-based monitoring and analytics platform, driven by accelerated digital transformation and cloud migration across organizations. Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver, along with an expanding portfolio.
The stock currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for 2023 earnings has been revised upward by a couple of cents in the past seven days to $1.53 per share, which calls for an increase of 56.1% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.5%.
Datadog, Inc. Price and Consensus
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote