As Q4 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the cybersecurity stocks, including Rapid7 (NASDAQ:RPD) 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 8 cybersecurity stocks we track reported a slower Q4; on average, revenues beat analyst consensus estimates by 2.33%, while on average next quarter revenue guidance was 0.06% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows , but cybersecurity stocks held their ground better than others, with share prices down 0.65% since the previous earnings results, on average.
Weakest Q4: 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 $184.5 million, up 21.7% year on year, beating analyst expectations by 2.72%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.
“Rapid7 ended the year with revenue, operating profit, and free cash flow that exceeded our targeted ranges. Amidst an evolving economic landscape, we see customers continuing to expand their wallet share around our leading Insight platform, with ARR per customer growing double-digits from the prior year,” said Corey Thomas, Chairman and CEO of Rapid7.
The stock is down 20.7% since the results and currently trades at $40.82.
Read our full report on Rapid7 here, it's free.
Best Q4: 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 $387.6 million, up 51.7% year on year, beating analyst expectations by 6.26%. Despite the stock dropping on the results, it was a very strong quarter for the company, with exceptional revenue growth and a solid beat of analyst estimates.
Zscaler pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 15.8% since the results and currently trades at $112.99.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
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 $637.4 million, up 47.9% year on year, beating analyst expectations by 1.68%. It was a decent quarter for the company, with exceptional revenue growth but underwhelming guidance for the next year.
The stock is up 6.64% since the results and currently trades at $133.2.
Read our full analysis of CrowdStrike's results here.
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 $184.6 million, up 23.9% year on year, beating analyst expectations by 1.79%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and the full year.
The stock is up 0.46% since the results and currently trades at $43.62.
Read our full, actionable report on Tenable 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 $130.8 million, up 19.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and the full year.
Qualys had the slowest revenue growth among the peers. The stock is up 1.01% since the results and currently trades at $123.5.
Read our full, actionable report on Qualys here, it's free.
The author has no position in any of the stocks mentioned