Looking back on cybersecurity stocks' Q1 earnings, we examine this quarter's best and worst performers, including 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 weaker Q1; on average, revenues beat analyst consensus estimates by 0.65%, while on average next quarter revenue guidance was 1.16% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but cybersecurity stocks held their ground better than others, with share prices down 0.93% since the previous earnings results, on average.
Best Q1: CrowdStrike (NASDAQ:CRWD)
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 $692.6 million, up 42% year on year, beating analyst expectations by 2.42%. It was a decent quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter and full year above analysts' estimates.
“CrowdStrike's first quarter results exceeded our guided metrics and reached new financial milestones, delivering the winning combination of growth, profitability and free cash flow at scale,” said George Kurtz, CrowdStrike’s president, chief executive officer and co-founder.
CrowdStrike achieved the strongest analyst estimates beat and highest full year guidance raise of the whole group. The stock is down 6.01% since the results and currently trades at $150.4.
Is now the time to buy CrowdStrike? Access our full analysis of the earnings results here, it's free.
Zscaler (NASDAQ:ZS)
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 $418.8 million, up 46% year on year, beating analyst expectations by 1.71%. It was a decent quarter for the company, with a beat of key analyst estimates and revenue guidance for the next quarter above Consensus.
The stock is up 12.1% since the results and currently trades at $151.42.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $133.4 million, up 70.5% year on year, missing analyst expectations by 2.36%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
SentinelOne delivered the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates in the group. The company added 12 enterprise customers paying more than $100,000 annually to a total of 917. The stock is down 26.4% since the results and currently trades at $15.25.
Read our full analysis of SentinelOne's results here.
Okta (NASDAQ:OKTA)
Founded during the aftermath of the financial crisis in 2009, Okta (NASDAQ:OKTA) is a cloud-based software as a service platform that helps companies manage identity for their employees and customers.
Okta reported revenues of $518 million, up 24.8% year on year, beating analyst expectations by 1.43%. It was a decent quarter for the company, with optimistic revenue guidance for the next quarter. The key negative was that cRPO (current remaining performance obligations) guidance for the next quarter was below, and since this is a leading indicator of revenue, it seemed to drive the narrative and stock action.
The stock is down 21.3% since the results and currently trades at $71.62.
Read our full, actionable report on Okta here, it's free.
Varonis (NASDAQ:VRNS)
Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.
Varonis reported revenues of $107.3 million, up 11.5% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
Varonis had the slowest revenue growth among the peers. The stock is up 8.84% since the results and currently trades at $25.25.
Read our full, actionable report on Varonis here, it's free.
The author has no position in any of the stocks mentioned