Cyberattacks continue to pose a significant threat to companies. A recent survey reported that over 90% of IT professionals thought that the volume and intensity of security threats are rising. Ransomware attacks rose 27% in the last year, while 41% of enterprises experienced malware. 57% of the surveyed professionals were also concerned about the security implications of the proliferation of AI. Moreover, cyberattacks can be a large financial burden for companies. For example, hotel and casino owner, Caesars (NASDAQ:CZR), shelled out $15 million last year to end a cyberattack. Meanwhile, MGM (NYSE:MGM) reported that over 10 days of downtime for its hotels and casinos, costing tens of million of dollars. In 2024, both Microsoft (NASDAQ:MSFT) and Bank of America (NYSE:BAC) have suffered major cyberattacks. Given these issues and concerns, I believe that many cybersecurity stocks will thrive going forward. Here are three names that are well-positioned to generate huge profits for long-term investors.
CyberArk (CYBR)
Focused on identity security, Israel-based CyberArk (NASDAQ:CYBR) is rapidly growing. Its top line soared to $223 million, up 32% last quarter versus the same period a year earlier. Moreover, its subscription revenue soared 70% year-over-year to $150.3 million, while its net income came in at $8.9 million.
Bank of America has deemed CyberArk a market leader in identity management. The bank thinks that CyberArk’s 2027 free cash flow goal of $375 million is conservative. It also identified CYBR as a top option among cybersecurity stocks, with a relatively attractive valuation.
Investor’s Business Daily also gives CYBR its highest possible Composite rating of 99. This shows its confidence in CYBR’s strong growth and positive outlook, making it one of the best cybersecurity stocks to buy.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) is a leader in providing highly advanced firewalls, which are a form of cyberattack protection.
Bank of America sang Fortinet’s praises recently. The bank believes the company will benefit from a rebound of the firewall market, which it anticipates growing by 15% come 2025. It also believes that FTNT’s valuation is attractive. Indeed, the company’s price/earnings-to-growth ratio of 1.8 is rather low for a highly successful IT company.
Last quarter, Fortinet’s top line climbed 10% versus the same period a year earlier to $1.4 billion. In 2023, its operating income soared 28% to $1.2 billion.
SentinelOne (S)
SentinelOne (NYSE:S) provides AI-powered autonomous capabilities for preventing, detecting and responding to threats.
Like CyberArk, SentinelOne is expanding rapidly as its top line soared 38% last quarter versus the same period a year earlier. Meanwhile, its net cash used in operating activities fell to $6.37 million last year from $193.29 million in 2022. In a recent statement, CEO Tomer Weingarten reported that companies were rapidly choosing SentinelOne for various security needs, such as endpoint, data and cloud security.
S stock fell sharply in the wake of the firm’s results as the Street was upset about the company’s lower than expected annual recurring revenue and its full year revenue guidance which was a bit lower than expected.
The Street was not pleased with SentinelOne’s recent results, which reported lower than expected annual recurring revenue (ARR) and full-year revenue guidance. This caused an unfortunate drop in SentinelOne’s stock value.
However, Bank of America reported that the company’s ARR came in only slightly below analysts’ average estimate, while the firm’s guidance is conservative. The bank is optimistic about SentinelOne’s competitive position, along with its and its pathway to profitability and free cash flow generation.
On the date of publication, Larry Ramer 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.
