The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Qualys (NASDAQ:QLYS) and the rest of the cybersecurity stocks fared in Q3.
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 8 cybersecurity stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 2.1%, while on average next quarter revenue guidance was 0.45% 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 4.12% since the previous earnings results, on average.
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 $125.5 million, up 19.6% year on year, in line with analyst expectations. It was a weaker quarter for the company, with revenue guidance for the next quarter below analysts' expectations.
"In Q3, we delivered another quarter of strong revenue growth and cash flow generation," said Sumedh Thakar, president and CEO.
Qualys delivered the slowest revenue growth of the whole group. The stock is down 19.2% since the results and currently trades at $108.
Is now the time to buy Qualys? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $355.5 million, up 54.2% year on year, beating analyst expectations by 4.33%. Despite the stock dropping on the results, it was a very strong quarter for the company, with exceptional revenue growth and very optimistic guidance for the next quarter.
Zscaler delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 19.9% since the results and currently trades at $115.74.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Rapid7 (NASDAQ:RPD)
Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.
Rapid7 reported revenues of $175.7 million, up 25.6% year on year, missing analyst expectations by 0.12%. It was a weak quarter for the company, with revenue guidance for the next quarter and full year missing analysts' expectations.
Rapid7 had the weakest performance against analyst estimates and weakest full year guidance update in the group. The company added 167 customers to a total of 10,791. The stock is down 12.7% since the results and currently trades at $34.1.
Read our full analysis of Rapid7's results here.
Palo Alto Networks (NASDAQ: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 $1.56 billion, up 25.3% year on year, in line with analyst expectations. It was a decent quarter for the company, with a significant improvement in gross margin but underwhelming revenue guidance for the next quarter.
The stock is down 8.68% since the results and currently trades at $143.02.
Read our full, actionable report on Palo Alto Networks here, it's free.
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 $115.3 million, up 105% year on year, beating analyst expectations by 3.89%. It was a decent quarter for the company, with exceptional revenue growth but a decline in net revenue retention rate.
SentinelOne scored the fastest revenue growth among the peers. The company added 72 enterprise customers paying more than $100,000 annually to a total of 827. The stock is up 3.18% since the results and currently trades at $14.59.
Read our full, actionable report on SentinelOne here, it's free.
The author has no position in any of the stocks mentioned