As we reflect back on the just completed Q3 cybersecurity sector earnings season, we dig into the relative performance of CrowdStrike (NASDAQ:CRWD) and its peers.
Cybersecurity continues to be one of the fastest growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location.
The 9 cybersecurity stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 5.5%, and next quarter revenue guidance was 2.46% above consensus. While the whole software sector has been facing almost a 30% sell-off since late last year, cybersecurity stocks held their ground a lot better, often posting only single digit declines.
Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.
CrowdStrike reported revenues of $380 million, up 63.4% year on year, beating analyst expectations by 4.35%. It was a strong quarter for the company, with an exceptional revenue growth.
"CrowdStrike delivered a robust third quarter with broad-based strength across multiple areas of the business leading to net new ARR growth accelerating and ending ARR growing 67% year-over-year to surpass the $1.5 billion milestone. Our outstanding results this quarter demonstrate the flywheel effect of our platform and reflect continued strong customer adoption for our core products in addition to the growing success of our newer product initiatives including identity protection, log management and cloud," said George Kurtz, CrowdStrike’s co-founder and chief executive officer.
The stock is down 7.48% since the results and currently trades at $186.41.
Best Q3: SentinelOne (NYSE:S)
With roots in the Israeli cyber intelligence community, SentinelOne (NYSE:S) provides software to help organizations efficiently detect, prevent, and investigate cyber attacks.
SentinelOne reported revenues of $56 million, up 128% year on year, beating analyst expectations by 12.9%. It was a stunning quarter for the company, with a significant improvement in gross margin and an impressive beat of analyst estimates.
SentinelOne achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 71 enterprise customers paying more than $100,000 annually to a total of 416. The stock is down 15.9% since the results and currently trades at $43.
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Slowest Q3: SailPoint (NYSE:SAIL)
Started by Mark McClain after his previous identity management company got acquired by Sun Microsystems, SailPoint (NYSE:SAIL) provides software for organizations to manage the digital identity of employees, customers, and partners.
SailPoint reported revenues of $110.1 million, up 17.1% year on year, beating analyst expectations by 5.98%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in gross margin.
The stock is down 7.51% since the results and currently trades at $44.56.
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software as a service that helps companies securely connect to applications and networks in the cloud.
Zscaler reported revenues of $230.5 million, up 61.6% year on year, beating analyst expectations by 8.59%. It was an exceptional quarter for the company, with a very optimistic guidance for the next quarter.
The stock is down 24.2% since the results and currently trades at $263.50.
Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.
Tenable reported revenues of $138.6 million, up 23.4% year on year, beating analyst expectations by 3.01%. It was a decent quarter for the company, with a solid beat of analyst estimates.
The stock is down 4.38% since the results and currently trades at $49.47.
The author has no position in any of the stocks mentioned