3 Cybersecurity Stocks With Big Growth Potential


  • Fortify your portfolio with the best cybersecurity stocks to buy.
  • CrowdStrike (CRWD): Undisputed leader in endpoint security.
  • Cloudflare (NET): Record number of deals and blow-out operational income growth points to incredible progress.
  • Nice (NICE): Though a secondary play, Nice has been growing its cybersecurity presence at a remarkable pace each quarter.
cybersecurity stocks to buy - 3 Cybersecurity Stocks With Big Growth Potential

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With the world becoming more interconnected than ever, the demand for cybersecurity solutions will reach unprecedented heights. However, cybersecurity stocks to buy took a massive beating last year, with leading players in the sphere down over 50% from their peak in 2021. Nevertheless, the urgency to effectively safeguard networks and information systems from digital threats remains as critical as ever.

Cyberattacks are on the rise, and geopolitical tensions, with the Russian invasion of Ukraine, will likely lead to greater Western budgetary spending in this domain. Likewise, Gartner, a renowned research firm, projects that by 2025, a staggering 45% of companies globally will have fallen prey to attacks on software supply chains, a 300% increase from last year. Therefore, cybersecurity firms offer essential services that are undervalued in the current landscape. Having said that, let’s look at three of the best cybersecurity stocks to buy at this time.

Cybersecurity Stocks to Buy: CrowdStrike (CRWD)

CrowdStrike sign and logo at headquarters in Silicon Valley. CRWD stock.
Source: Michael Vi / Shutterstock

CrowdStrike (NASDAQ:CRWD)  has cemented its status as a titan in endpoint security, clinching the top spot in IDC’s Endpoint Security Market Share report for an astounding third consecutive time. Endpoint security essentially involves protecting computer networks from possible threats by securing all devices connected to the network.

The firm wrapped up last year with a spectacular 54% revenue growth, showcasing robust adoption growth across its modules. It recorded impressive adoption growth rates for five or more, six or more, and seven or more modules increasing by 62%, 39%, and 22%, respectively, in the fourth quarter. Moreover, net retention rates have risen to 125% and are on track to achieve its ambitious recurring sales target of $5 billion by 2026. Its tremendous sales growth this year, despite a rough operating environment, is a testament to the mission-critical service provided by CrowdStrike. Therefore, CRWD stock is arguably the best among cybersecurity stocks to buy for growth.

Cloudflare (NET)

A close-up of the Cloudflare (NET) logo at the company headquarters in California.
Source: Sundry Photography / Shutterstock.com

Cloudflare (NYSE:NET) is a top content delivery network (CDN) provider that speeds up digital content distribution on websites, effectively shielding them from bot-driven attacks. Over the years, its business has been remarkably consistent, turning profitable on a non-GAAP basis last year.

Its stellar fourth-quarter results testify to how crucial its services are to its customer base. It served over 2,000 customers paying over $100,000 annually at the end of its final quarter. On top of that, it signed a record number of deals larger than $500,000 after the fourth quarter. Revenue growth shot up $274.7 million, representing a 42% bump YOY, topping Wall Street estimates by a significant margin. Furthermore, adjusted net income blew up by over 21,000% to $21.6 million.

For fiscal 2023, it expects sales to rise 36% to 38% while expecting adjusted EPS to grow by 15% to 23%. Therefore, despite the headwinds, Cloudflare continues on its path to robust sales.

Nice (NICE)

An image of the word cybersecurity overlaid over a pixelated background, images of locks and shields and virus icons surrounding it
Source: BeeBright / Shutterstock

Nice (NASDAQ:NICE) is a trailblazer in the realm of contact center software. The firm boasts an impressive market presence, with one in every three customer service agents leveraging its potent technology. Additionally, its unique distribution advantage, coupled with the high barriers to entry, renders it a major force in the market.

In recent years, it has forayed into the cybersecurity realm with a portfolio of services that help companies fight financial crime. These services include anti-laundering, data intelligence, market compliance, enterprise fraud management, and case management. According to the company website, it serves more than 750 clients, with five billion transactions monitored daily. Moreover, it has received multiple accolades for its services in the security space, including being named a leader by Forrester Wave in anti-money laundering solutions.

Nice reigns supreme across multiple domains and is essentially a harbinger of the digital customer service era. Furthermore, it continues to grow its business profitably, with an A-graded profitability profile that shows double-digit growth across key metrics.

On the date of publication, Muslim Farooque 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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

Article printed from InvestorPlace Media, https://investorplace.com/2023/04/3-cybersecurity-stocks-with-big-growth-potential/.

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