Cybersecurity is a growing priority for corporate America. According to IBM (NYSE:IBM), the average cost of a data breach at a company in the U.S. more than doubled to $9.44 million in 2022 from $3.6 million in 2006. Globally, the average cyberattack costs companies $4.35 million. With the incidence of cyberattacks growing, the market for cybersecurity is exploding. This has led to the rise of bargain cybersecurity stocks.
Consulting firm McKinsey & Co. says that the cybersecurity industry has a $2 trillion addressable market and only around $150 billion has been realized. This means that there is a huge market opportunity for companies that specialize in keeping networks and computers secure, preventing cyberattacks in the process.
For investors, there is an opportunity right now to put capital to work in leading cybersecurity firms that have seen their share prices pushed lower over the last year.
Here are te best bargain cybersecurity stocks to consider.
CrowdStrike (CRWD)
CrowdStrike (NASDAQ:CRWD) had a tough go of it in 2022. Caught in the “tech wreck” that hit highly valued technology stocks as the U.S. Federal Reserve raised interest rates, CRWD stock fell sharply throughout last year. Consequently, the company’s share price is down 20% from where it was trading at 12 months ago. Despite recovering over the last six months, CrowdStrike’s stock is currently 24% below its 52-week high reached in late summer 2022. This makes it one of those bargain cybersecurity stocks to buy.
This presents an opportunity to own a best-in-class cybersecurity stock and a leader in the sector. Many analysts continue to be bullish on CRWD stock and see it as a long-term growth play. Analysts especially like that CrowdStrike has been leading the way when it comes to incorporating artificial intelligence into cybersecurity solutions, adding the technology into its popular Falcon Platform. CrowdStrike is also doing a great job of expanding its relationship with customers, 62% of whom use five or more of its products.
CRWD is a bargain cybersecurity stock.
Okta (OKTA)
Okta (NASDAQ:OKTA) is another cybersecurity stock that has taken a beating, down 30% over the last 12 months. The company that specializes in helping companies manage user authentications and online sign-ins to secure systems has seen its share price tentatively recover 5% this year but remains seriously depressed compared to many other tech names. OKTA stock’s recovery had been better prior to the earnings it released in June.
While Okta managed to issue strong financial results, it provided weak forward guidance that appeared to spook analysts and investors. As a result, the share price pulled back more than 20% in June, making now an opportune time to take a position. For its first quarter of fiscal 2024, Okta reported that its revenue climbed 25% year-over-year to $518 million, while its net loss was cut in half from a year ago to $119 million.
Total customers increased by 14% in the period. The strong print bodes well for the future growth of OKTA stock.
SentinelOne (S)
For a cybersecurity stock that has been truly cut down over the last 12 months, check out SentinelOne (NYSE:S). The company’s share price is trading 40% lower than where it was 12 months ago. S stock is now down 64% from its market debut in July 2021. The good news is that the share price appears to have bottomed at the start of June and has since risen nearly 20%, suggesting now would be a smart time for investors to take a position and rise the stock higher.
Like Okta, SentinelOne’s stock endured a big sell-off in June after the company’s latest earnings. SentinelOne lowered its sales forecast for all of this year to between $590 million and $600 million, down from previous guidance for revenue of $631 million to $640 million. That sent many shareholders running for the exits. However, overlooked in the rush to judgment was the fact that SentinelOne grew its revenue by 70% year-over-year to $133.4 million in the quarter. At current levels, S stock looks cheap.
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.
