2438

Q1 Earnings Highs And Lows: Rapid7 (NASDAQ:RPD) Vs The Rest Of The Cybersecurity Stocks


Adam Hejl /
2024/07/10 4:57 am EDT

Let's dig into the relative performance of Rapid7 (NASDAQ:RPD) and its peers as we unravel the now-completed Q1 cybersecurity earnings season.

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 slower Q1; on average, revenues beat analyst consensus estimates by 1.4%. while next quarter's revenue guidance was 0.5% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and cybersecurity stocks have held roughly steady amidst all this, with share prices up 2.9% on average since the previous earnings results.

Weakest Q1: 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 $205.1 million, up 12% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and decelerating customer growth.

“We continued to see solid traction with our consolidated threat detection and response solutions during the first quarter”, said Corey Thomas, Chairman and CEO of Rapid7.

Rapid7 Total Revenue

Rapid7 delivered the weakest full-year guidance update of the whole group. The company lost -64 customers and ended up with a total of 11,462. The stock is down 6.3% since reporting and currently trades at $42.94.

Read our full report on Rapid7 here, it's 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 $553.2 million, up 32.1% year on year, outperforming analysts' expectations by 3.2%. It was a very strong quarter for the company with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.

Zscaler Total Revenue

Zscaler achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 30.1% since reporting. It currently trades at $202.25.

Is now the time to buy Zscaler? Access our full analysis of the earnings results 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 $145.8 million, up 11.6% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.

Qualys posted the weakest performance against analyst estimates in the group. As expected, the stock is down 15.8% since the results and currently trades at $139.97.

Read our full analysis of Qualys's results here.

Varonis (NASDAQ:VRNS)

Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.

Varonis reported revenues of $114 million, up 6.2% year on year, in line with analysts' expectations. Looking more broadly, it was a mixed quarter for the company with a solid beat of analysts' billings estimates but a decline in its gross margin.

Varonis had the slowest revenue growth among its peers. The stock is up 4.1% since reporting and currently trades at $46.5.

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

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 15.3% year on year, in line with analysts' expectations. Looking more broadly, it was an ok quarter for the company with a narrow beat of analysts' billings estimates but a decline in its gross margin.

The stock is up 3.8% since reporting and currently trades at $336.31.

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

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.