It’s about as embarrassing of a situation as a telecommunications firm can find itself in. Recently, AT&T (NYSE:T) revealed that it suffered a major data breach. About the only positive here is for cybersecurity stocks. This sector will likely see a sustained swing higher as data security concerns make headlines once again.

Between May 1, 2022 and Oct. 31 of that year, “nearly all” of the carrier’s cellular customers had their call records and texts exposed. Fortunately, the breach doesn’t include the content of the calls or texts. Also, the breach does not include sensitive information such as Social Security numbers or date of birth. Still, it’s a major privacy violation.

What’s even more ignominious, AT&T had to pay a ransom for about $370,000 – in cryptocurrencies, of course. This factor too could positively affect cybersecurity stocks. Essentially, hackers are realizing that crime does pay and so they’ll continue engaging in nefarious activities.

Sadly, the idea of negotiating with hackers in exchange for crypto has become normalized. People and enterprises must protect themselves. With that, below are cybersecurity stocks to consider.

Palo Alto Networks (PANW)

One of the top cybersecurity stocks in the business, Palo Alto Networks (NASDAQ:PANW) has made a name for itself primarily through its next-generation firewalls. This innovation provides advanced threat protection, intrusion prevention and visibility to operational functionality. Further, Palo Alto provides a range of security products, including endpoint protection and cloud security.

With the costs of cyberbreaches consistently rising, it’s never been more important for enterprises to seek protection. That’s not just a narrative as Palo Alto has benefited financially from its superior products. In the past four quarters, the company posted an average earnings per share of $1.40. This handily beat the average analyst estimate of $1.25, yielding an earnings surprise of 12.35%.

To be fair, investors will be paying a premium for the performance. Shares trade hands at 15.3X trailing-year sales. That’s noticeably above the trailing-year average of about 12.8X. Still, the point to consider is the business expansion. In fiscal 2024, sales could rise by 16.1% to $8 billion. And in the following year, revenue may hit $9.11 billion.

CrowdStrike (CRWD)

One of the top providers of cloud-native endpoint protection, CrowdStrike (NASDAQ:CRWD) offers advanced detection and response capabilities. In particular, its platform integrates multiple functionalities, including threat intelligence and incident responses. As well, CrowdStrike leverages artificial intelligence and machine learning to identify and address threats effectively. Not surprisingly, CRWD stock has been on the move, gaining nearly 53% since the start of the year.

Financially, CrowdStrike continues to outperform analysts’ expectations. In the past four quarters, the company posted an average EPS of 86 cents. This figure beat out the expected tally of 75 cents. Further, the earnings surprise landed at an impressive 15.83%.

If there is a drawback to CRWD stock, it’s that everyone apparently loves it. Shares trade hands at 27.82X trailing-year sales. That’s a gargantuan multiple. It’s also much higher than the average multiple of 18.4X seen during the past one-year period.

Nevertheless, the upside here is the analyst projections. For fiscal 2025 (calendar 2024), experts believe that sales could hit $4 billion. If so, that would be up 30.8% from the prior year. In fiscal 2026, revenue could clock in at $5.05 billion, up 26.3%. It’s one of the cybersecurity stocks to watch.

Fortinet (FTNT)

Based in Sunnyvale, California, Fortinet (NASDAQ:FTNT) offers a wide range of integrated cybersecurity solutions. These include firewalls, antivirus programs and threat-prevention systems. Notably, its mainline firewall product is one of the industry’s most advanced, delivering a mixture of robust performance and extensive security features. The company also specializes in end-to-end security, presenting a formidable defensive network.

While enterprise spending may be a concern for the broader software space, going without adequate cybersecurity protection could be a business liability. Thus, it’s no shock that Fortinet has outperformed analyst expectations. In the past four quarters, Fortinet posted an average EPS of 43 cents, beating out the consensus view of 38 cents. This yielded an earnings surprise of 14.38%.

What’s perhaps most attractive about FTNT stock is the valuation. Currently, shares trade hands at 8.64X trailing-year sales. While elevated against the software industry, the market previously priced FTNT (during the past year) at 10.67X.

Further, experts believe that sales could hit $5.8 billion this year, implying growth of 9.3%. Revenue could rise to $6.54 billion in the following year, making FTNT an attractive wager among cybersecurity stocks.

On the date of publication, Josh Enomoto held a LONG position in T stock. 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.