Wrapping up Q4 earnings, we look at the numbers and key takeaways for the cybersecurity stocks, including Okta (NASDAQ:OKTA) 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 mixed Q4; on average, revenues beat analyst consensus estimates by 1.9%, while next quarter's revenue guidance was in line with consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. The beginning of 2024 saw mixed inflation data, however, leading to more volatile stock performance, and cybersecurity stocks have had a rough stretch, with share prices down 12.3% on average since the previous earnings results.
Best Q4: 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 $605 million, up 18.6% year on year, topping analyst expectations by 3%. It was a very strong quarter for the company, with optimistic revenue guidance for next quarter, which exceeded analysts' expectations. Its revenue in Q4 also outperformed Wall Street's estimates, alongside strong free cash flow.
Okta pulled off the highest full-year guidance raise of the whole group. The stock is up 7.5% since the results and currently trades at $93.95.
Is now the time to buy Okta? 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 $525 million, up 35.4% year on year, outperforming analyst expectations by 3.6%. It was a very strong quarter for the company, with an impressive beat of analysts' revenue and EPS estimates.
Zscaler scored the biggest analyst estimates beat among its peers. The stock is down 27.8% since the results and currently trades at $174.56.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
Weakest Q4: Palo Alto Networks (NASDAQ:PANW)
Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.
Palo Alto Networks reported revenues of $1.98 billion, up 19.3% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.
Palo Alto Networks had the weakest full-year guidance update in the group. The stock is down 25.6% since the results and currently trades at $272.62.
Read our full analysis of Palo Alto Networks's results here.
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 $174.2 million, up 38.1% year on year, surpassing analyst expectations by 2.8%. It was a weaker quarter for the company, with its net revenue retention rate of 115% missing estimates of 118%. Its revenue guidance for the upcoming year also came in below expectations, suggesting a slowdown in demand amidst an intense competitive landscape with cybersecurity peers like CrowdStrike.
SentinelOne delivered the fastest revenue growth among its peers. The company added 73 enterprise customers paying more than $100,000 annually to reach a total of 1,133. The stock is down 26.2% since the results and currently trades at $20.61.
Read our full, actionable report on SentinelOne here, it's free.
Tenable (NASDAQ:TENB)
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 $213.3 million, up 15.5% year on year, surpassing analyst expectations by 3.2%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and full-year revenue.
The stock is down 4.2% since the results and currently trades at $45.6.
Read our full, actionable report on Tenable here, it's free.
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