When it comes to cyber threats, we’re sitting ducks. Our government, cities, major corporations, schools, hospitals, and even millions of individuals are still poorly prepared for more attacks. All of which is creating big opportunities for leading cybersecurity stocks.
AT&T (NYSE:T) just said nearly all of its wireless subscribers’ call and text interactions were exposed in a massive hack in April. Auto dealerships just lost about $1.02 billion in business after the CDK cyberattack.
Even Rite Aid (OTCMKTS:RADCQ) just confirmed it was hacked, with the cybercriminals noting: “While having access to the Rite Aid network we obtained over 10 GB of customer information equating to around 45 million lines of people’s personal information. This information includes name, address, dl_id number, dob, and Riteaid rewards number.”
Worse, according to a Cybersecurity Ventures report, “the cost of cybercrime hit $8 trillion in 2023 — translating to over $250,000 per second. The total annual cost is projected to rise to $10.5 trillion by 2025,” as noted by USA Today.
The only positive is that with every major cyberattack, cybersecurity stocks get a boost, including:
Palo Alto Networks (PANW)
When I mentioned Palo Alto Networks (NASDAQ:PANW) on June 6, I said, “Over the last few months, PANW ran from $265 to $320. Now back to $290, I’d again use weakness as an opportunity.” Now up to $343, PANW — one of the top cybersecurity stocks to own — is still a strong buy.
Helping, analysts at D.A. Davidson recently initiated a buy rating on the stock, with a price target of $380. Better, Baird has an outperform rating on the stock, with a price target of $360. Plus, earnings have been solid.
In its third quarter, its earnings per share of $1.23 beat by seven cents. Revenue of $1.98 billion — up 15.1% year over year — beat by $10 million. Moving forward, the company expects fourth-quarter billings to range from $3.43 billion to $3.48 billion, which is a year-over-year growth range of 9% to 10%. It also expects to see total revenue of $2.15 billion to $2.17 billion, as compared to estimates of $2.16 billion.
Zscaler (ZS)
On June 6, I also mentioned opportunity in Zscaler (NASDAQ:ZS), noting, “With negativity now priced in, I’d use the weakness as an opportunity to buy the stock.”
At the time, ZS traded at about $174. Today, it’s up to $204.47 and is also still a strong buy. From its last traded price of $204.47, I’d like to see it initially retest $260 near term. Better, about 25 analysts rate ZS as a buy with an average price target of $232.04.
Helping, the company just unveiled multiple innovations to its “AI Data Protection Platform that leverage the world’s largest security cloud and the power of AI,” as noted by the company.
That includes its “‘Gen AI App Security’, which offers context-rich user and risk correlation, providing insights into risky prompts, AI app usage and granular policy controls,” says TechnologyMagazine.com. “This feature is crucial as the adoption of AI technologies continues to accelerate, presenting new security challenges.”
CyberArk Software (CYBR)
“I’d also use weakness as an opportunity in CyberArk Software (NASDAQ:CYBR),” I added on June 6. At the time, CYBR traded at about $225. Today, it’s up to $275.31 and is still a buy. From $275.31, I’d like to see it test $300 next.
Helping, analysts at Barclays just raised their price target on CYBR to $315 with an outperform rating. “The analyst thinks security stocks have favorable setups into the Q2 earnings. Channel checks indicate enterprise security spending either held stable or improved moderately in Q2 versus Q1 for several security names,” added TheFly.com.
Even better, 22 analysts have a buy rating on the stock with an average price target of $299. The highest price target at the moment is $315, as set by Barclays.
Earnings have been solid. In its first quarter, the company posted earnings-per-share of 75 cents, which beat by 48 cents. Revenue of $221.6 million – up 37% year over year – beat by $8.38 million. The subscription portion of its annual recurring revenue jumped 54% to $621 million year over year. Total ARR jumped 69% to $156.2 million.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
