Cybersecurity stocks continue to be one of the hottest parts of the technology trade. While artificial intelligence (AI) has been getting all of the attention in the business press over the last year, most cybersecurity stocks have more than doubled in that time, trouncing the returns of the broader market. Best of all, analysts see more runway ahead for cybersecurity stocks, with Wells Fargo (NYSE:WFC) naming CrowdStrike Holdings (NASDAQ:CRWD) and Zscaler (NASDAQ:ZS) top picks for 2024. Indeed, revenue in the cybersecurity space is expected to grow at a CAGR of 10.56%, reaching $273.60 billion by 2028, according to Statista. Here are the top three cybersecurity stocks safeguarding our future.
CrowdStrike Holdings (CRWD)
CrowdStrike has been a top-performing cybersecurity stock over the last year. In the past 12 months, CRWD stock has gained 170%, including a 74% increase in the last six months alone. Through five years, the stock is up 306%. The company has been leading the way higher for cybersecurity stocks on the back of strong financial results. At the end of November, CrowdStrike reported a third-quarter print that beat analyst expectations and raised its full-year guidance.
The company announced Q3 revenue of $786 million and EPS of 82 cents. That topped Wall Street forecasts of $777 million in revenue and earnings of 74 cents a share. In terms of guidance, CrowdStrike raised its outlook for the entire year, saying it now sees revenue of $3.05 billion and a profit of $2.96 a share. The company reiterated its goal to reach $10 billion in annual recurring revenue within the next seven years.
Palo Alto Networks (PANW)
Performing almost as well as CrowdStrike over the last 12 months has been cybersecurity firm Palo Alto Networks (NASDAQ:PANW), whose stock has risen 114%. Through five years, PANW stock is up an impressive 343%. The company’s share price dipped a bit since the end of November, when Q3 earnings showed that quarterly billings were less than had been expected on Wall Street. Palo Alto Networks’ billings during Q3 totaled $2.02 billion, less than the consensus estimate of $2.05 billion to $2.08 billion.
However, the soft billings didn’t prevent Palo Alto Networks from beating earnings forecasts overall. The company reported EPS of $1.38, which was better than the $1.16 forecast among analysts. Sales in the quarter came in at $1.88 billion, up 20% from a year ago and above forecasts of $1.84 billion. Looking ahead to the just completed fourth quarter, Palo Alto Networks forecast revenue of $1.95 billion to $1.98 billion, which is in line with analyst views. Profit is expected at $1.29 to $1.31 a share, which is above consensus estimates of $1.25.
Zscaler (ZS)
Beating both CRWD stock and PANW stock with its five-year performance is Zscaler. Since 2019, ZS stock has risen nearly 400%, including a 110% gain over the past 12 months. Zscaler remains a fast moving growth stock that has impressed analysts with better-than-expected financial results and increased forward guidance. In late November, the company announced EPS of 67 cents for what was its fiscal first quarter, and revenue of $496.7 million, which was up 40% from a year earlier.
Both the top and bottom line results for Zscaler beat Wall Street forecasts. The company also announced that its billings rose 34% to $456.6 million, which beat consensus estimates of $441 million. Sadly, ZS stock dropped after the company said that it intends to boost spending going forward to help it gain market share. Still, the company raised its revenue forecast to $507 million and EPS to 58 cents for Q4, which are above the consensus view of analysts who track the company’s progress.
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.
