The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the cybersecurity stocks have fared in Q3, starting with Rapid7 (NASDAQ:RPD).
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. Increasing interest rates hurt growth companies as investors search for near-term cash flows and while some of the cybersecurity stocks have fared somewhat better than others, they have not been spared, with share prices declining 9.18% since the previous earnings results, on average.
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, 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.
“Customers’ increasing focus on better value and higher efficacy of their security solutions in today’s shifting landscape supported 24% year-over-year growth in our third quarter ARR to $684 million,” said Corey Thomas, Chairman and CEO of Rapid7.
Rapid7 delivered the weakest performance against analyst estimates and weakest full year guidance update of the whole group. The company added 167 customers to a total of 10,791. The stock is down 12.6% since the results and currently trades at $34.14.
Read our full report on Rapid7 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%. 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 27.5% since the results and currently trades at $104.8.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
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 $580.8 million, up 52.8% year on year, beating analyst expectations by 1.01%. Despite the solid topline growth, it was a slower quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
The stock is down 29% since the results and currently trades at $97.92.
Read our full analysis of CrowdStrike's results here.
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 $481 million, up 37.1% year on year, beating analyst expectations by 3.36%. It was a solid quarter for the company, with exceptional revenue growth and guidance for the next quarter in line with analysts' expectations.
The stock is up 23.4% since the results and currently trades at $65.83.
Read our full, actionable report on Okta 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 delivered 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 0.7% since the results and currently trades at $14.24.
Read our full, actionable report on SentinelOne here, it's free.
The author has no position in any of the stocks mentioned