Cyberattacks are on the rise. Last year featured 2,365 cyberattacks with a staggering 343 million victims. Data breaches were up by 72% compared to the previous record set in 2021. This makes cybersecurity stocks an even better option than usual.
It’s no secret why hackers are infiltrating databases and trying to access valuable documents. Cyber hackers can make a lot of money by digging up dirt or accessing sensitive information about customers, company projects and other details.
Cybersecurity firms aim to thwart these attacks and make them less common. These companies offer software that helps cybersecurity professionals monitor and address threats before they lead to significant cracks in digital protection. Some corporations offering these services have also generated solid long-term returns for their investors.
Investing in cybersecurity stocks can lead to market outperformance. Focusing on companies with rising revenue and profits is a good starting point. These are some of the top cybersecurity stocks to consider for the long run.
CommVault Systems (CVLT)
CommVault Systems (NASDAQ:CVLT) is a smaller cybersecurity company that commands a $5.5 billion valuation. It also trades at a relatively reasonable 33 P/E ratio. The stock has been a solid long-term pick for several years. Shares are up by 56% year-to-date (YTD) and have soared by 142% over the past five years.
The cloud security firm’s revenue is accelerating due to growing adoption of its subscriptions. Total annual recurring revenue currently stands at $770 million which is 16% higher than last year.
Revenue grew by 10% year-over-year (YOY) in Q4 FY24 to reach $223.3 million. Subscription revenue makes up more than half of the company’s total sales and jumped by 27% YOY. Both of these figures are higher than the growth rates for full-year fiscal 2024. CommVault Systems has even had enough money left over to initiate stock buybacks. The company bought back $50.4 million worth of shares in the fourth quarter and $184.0 million in shares throughout fiscal 2024.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) was once an easy “buy.” The stock has tripled over the past five years. It looked like gains would continue on the back of a 39 P/E ratio, but a series of disappointing earnings reports made shares less desirable. A 3% YTD gain highlights how little the stock’s price has moved recently.
However, a turnaround seems to be in the works. Fortinet reported 7% YOY revenue growth and 21% YOY net income growth in the first quarter. The global cybersecurity leader remains above 20%, and guidance suggests sequential revenue acceleration. Q2 revenue is projected to range from $1.375 billion to $1.435 billion. The midpoint, $1.40 billion, suggests that the firm will achieve 8.5% YOY revenue growth.
Fortinet has some uncertainty based on its “hold” rating. However, the average price target suggests a 16% upside, so there’s plenty of potential for things to go well. Investors can capitalize on present challenges and accumulate shares in a company with a lengthy record of excellence.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is one of the largest cloud service providers. Google Cloud has 11% of the cloud computing market share and looks poised to expand its presence. Google Cloud revenue increased by 28% YOY in the first quarter. Cloud computing makes up more than 10% of Alphabet’s total revenue.
Cloud platforms are important parts of cybersecurity. Businesses use these platforms to store data and become more efficient. Once companies start to use cloud platforms, it is very difficult to turn back. Cloud platforms form the digital backbone for many companies, and Alphabet regularly invests in its cybersecurity to keep customers protected. Alphabet’s plan to acquire cybersecurity startup Wiz for $23 billion further highlights the company’s commitment to cybersecurity.
Alphabet has delivered a 33% YTD gain for investors and has more than tripled over the past five years. Even with those gains, Wall Street analysts believe there’s more room for the stock to run. The average price target implies an 8% upside from current levels.
On this date of publication, Marc Guberti held long positions in CVLT and GOOG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
On the date of publication, the responsible editor held a LONG position in GOOG.
