The cybersecurity market is expanding rapidly. Corporations and individuals alike are putting more of a priority on protecting their computers, whether it is a large cloud storage network or one laptop computer. The spread of malware, spyware, ransomware, and other malicious viruses has everyone on edge and looking to protect their data. This had led to the rise of the best cybersecurity stocks.
Consulting firm McKinsey & Co. put out a report last fall that pegged the cybersecurity market at a $2 trillion opportunity for investors. The McKinsey report forecasts that damage from cyberattacks will surpass $10 trillion annually by 2025, a 300% increase from 2015 levels, and called on cybersecurity firms to step up and seize the opportunity in front of them.
While cybersecurity stocks have moved in fits and starts over the past year, with many pulled lower by the general market downturn, they are now recovering and moving higher, presenting an opportunity to investors. Here are three cybersecurity stocks you better be buying on each and every dip.
Palo Alto Networks (PANW)
Investment bank Morgan Stanley (NYSE:MS) recently named Palo Alto Networks (NASDAQ:PANW) its top cybersecurity pick, lifting its price target on the shares to $302 from $255 and maintaining an “overweight” (buy) rating on the stock.
Additionally, Morgan Stanley forecast that PANW stock will achieve a $100 billion market capitalization within the next 12 months, up from just under $75 billion today. The bullish call came after Palo Alto Networks’ latest earnings, which trounced Wall Street expectations. This makes it one of the best cybersecurity stocks.
PANW stock hit a 52-week high at the end of May immediately after its latest earnings release. The company reported earnings per share of $1.10 versus analysts’ consensus forecasts of 93 cents. Revenue in the fiscal third quarter came in at $1.72 billion, which was in line with Wall Street estimates. Perhaps most impactful, Palo Alto Networks raised its revenue growth forecast to between 25% and 26% for all of this year. PANW stock has gained 76% year to date and is up 250% over the last five years.
CrowdStrike (CRWD)
There still looks to be an opportunity in cybersecurity stock CrowdStrike (NASDAQ:CRWD). While the share price has increased 44% YTD, it is trading 18% lower than where it was in July 2022 and is 27% below its 52-week high. While CRWD stock is recovering after last year’s meltdown in technology stocks, the company’s share price still has a ways to go to reclaim new highs. This gives investors the ability to buy the dip in CrowdStrike.
Beyond last year’s tech wreck, CRWD stock has also been pushed lower by concerns over the company’s growth rate. In its most recent quarter, CrowdStrike reported revenue of $692 million, which was up 42% from a year earlier. While most companies would kill for that type of revenue growth, it was actually a slowdown from 61% revenue growth in the same quarter of the previous year.
Regardless, CrowdStrike continues to grow at a fast clip. And, CrowdStrike uses artificial intelligence to improve its protection each time a cyberattack occurs. This means it’s one of those best cybersecurity stocks to buy.
Fortinet (FTNT)
Fortinet’s (NASDAQ:FTNT) stock has been one of the best long-term performers among cybersecurity concerns. Over the last five years, FTNT stock has gained nearly 500%, including a 60% advance this year. The impressive performance has been driven by accelerating growth and strong earnings prints. Analysts see more gains ahead. Morgan Stanley recently increased its price target on FTNT stock to $84 a share, lifting it nearly 10% from $77 previously, while maintaining a “buy” rating on the security.
Today, Fortinet has more than 650,000 customers globally, including most Fortune 500 companies that rely on its technology to keep their networks and systems safe. Fortinet’s revenue is forecast to rise between 23% and 24% this year alone. The strong growth has helped to push FTNT stock steadily upwards. Its latest earnings saw Fortinet report 34 cents of EPS on $1.26 billion in revenue, topping Wall Street consensus estimates on both the top and bottom lines and vaulting the share price 6% higher in a single trading session.
On the date of publication, Joel Baglole 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.
