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Reflecting On Cybersecurity Stocks’ Q1 Earnings: CrowdStrike (NASDAQ:CRWD)


Adam Hejl /
2022/06/14 4:03 am EDT
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Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at CrowdStrike (NASDAQ:CRWD), and the best and worst performers in the cybersecurity group.

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 10 cybersecurity stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.71%, while on average next quarter revenue guidance was 2.04% above consensus. Tech stocks have had a rocky start in 2022, but cybersecurity stocks held their ground better than others, with share price down 8.53% since earnings, on average.

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 $487.8 million, up 61% year on year, beating analyst expectations by 5.05%. It was a strong quarter for the company, with an exceptional revenue growth and a solid beat of analyst estimates.

“CrowdStrike delivered an exceptional first quarter to kick off the fiscal year with $190 million in net new ARR, 61% ending ARR growth at scale and record cash flow. We saw strength across the platform including a record quarter for modules deployed in the public cloud, and over 100% year-over-year ending ARR growth for our emerging product group, which includes our Discover, Spotlight, Identity Protection and Log Management modules. We believe our single agent architecture, frictionless go-to-market, and rapid innovation engine provide CrowdStrike a wide competitive moat along with multiple avenues to drive long-term sustainable growth in both our core and expansion markets,” said George Kurtz, CrowdStrike’s co-founder and chief executive officer.

CrowdStrike Total Revenue

The stock is down 10.2% since the results and currently trades at $156.10.

Read why we think that CrowdStrike is one of the best cybersecurity stocks, our full report is free.

Best Q1: 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 $286.8 million, up 62.5% year on year, beating analyst expectations by 5.64%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.

Zscaler Total Revenue

The stock is down 0.44% since the results and currently trades at $141.50.

Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.

Slowest Q1: ForgeRock (NYSE:FORG)

Founded in Norway by former Sun Microsystems engineers, ForgeRock (NYSE:FORG) offers software as a service that helps companies secure and manage the identity of their customers and employees.

ForgeRock reported revenues of $48 million, up 13.4% year on year, beating analyst expectations by 3.35%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.

ForgeRock had the slowest revenue growth and weakest full year guidance update in the group. The stock is up 14.6% since the results and currently trades at $16.40.

Read our full analysis of ForgeRock's results here.

Palo Alto Networks (NYSE:PANW)

Founded in 2005 by a cybersecurity engineer Nir Zuk, Palo Alto Networks makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches and malware threats.

Palo Alto Networks reported revenues of $1.38 billion, up 29.1% year on year, beating analyst expectations by 2.03%. It was a mixed quarter for the company, with a strong top line growth but a decline in gross margin.

The stock is up 9.7% since the results and currently trades at $478.90.

Read our full, actionable report on Palo Alto Networks here, it's free.

Qualys (NASDAQ:QLYS)

Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ:QLYS) provides organizations with software to assess their exposure to cyber-attacks.

Qualys reported revenues of $113.4 million, up 17.2% year on year, in line with analyst expectations. It was a decent quarter for the company, with revenue guidance for the next quarter roughly in line with analysts' expectations.

Qualys had the weakest performance against analyst estimates among the peers. The stock is down 12.1% since the results and currently trades at $121.80.

Read our full, actionable report on Qualys here, it's free.

The author has no position in any of the stocks mentioned