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Spotting Winners: Rapid7 (NASDAQ:RPD) And Cybersecurity Stocks In Q4


Adam Hejl /
2022/04/05 7:17 am EDT
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Wrapping up Q4 earnings, we look at the numbers and key takeaways for 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 10 cybersecurity stocks we track reported a strong Q4; on average, revenues beat analyst consensus estimates by 5.66%, while on average next quarter revenue guidance was 3.48% above consensus. The technology sell-off has been putting pressure on stocks since November, but cybersecurity stocks held their ground better than others, with the share price up 18.2% since earnings, on average.

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 $151.6 million, up 34% year on year, beating analyst expectations by 3.94%. It was a mixed quarter for the company, with a decline in gross margin but optimistic guidance for the next quarter.

"We ended 2021 on a high note, delivering strong fourth quarter results across our security transformation and vulnerability management solutions. We grew ARR by 38% during the year while eclipsing 10,000 customers globally, highlighting our team's strong execution and the growing need for customers to manage increasingly complex security environments," said Corey Thomas, Chairman and CEO of Rapid7.

Rapid7 Total Revenue

The stock is up 13.5% since the results and currently trades at $113.98.

Is now the time to buy Rapid7? Access our full analysis of the earnings results here, it's free.

Best Q4: SailPoint (NYSE:SAIL)

Started by Mark McClain after his previous identity management company got acquired by Sun Microsystems, SailPoint (NYSE:SAIL) provides software for organizations to manage the digital identity of employees, customers, and partners.

SailPoint reported revenues of $135.5 million, up 31.2% year on year, beating analyst expectations by 19.1%. It was an exceptional quarter for the company, with a significant improvement in gross margin compared to the previous quarter, and an impressive beat of analyst estimates.

SailPoint Total Revenue

SailPoint delivered the strongest analyst estimates beat among its peers. The stock is up 27.3% since the results and currently trades at $52.66.

Is now the time to buy SailPoint? Access our full analysis of the earnings results here, it's free.

Weakest Q4: ForgeRock (NYSE:FORG)

Founded in Norway by former Sun Microsystems engineers, ForgeRock (NYSE:FORG) offers software as a service that helps companies secure and manage the identity of their customers and employees.

ForgeRock reported revenues of $47.9 million, up 19.3% year on year, beating analyst expectations by 1.69%. It was a weak quarter for the company, with a decline in gross margin and guidance for the next quarter below analyst estimates.

ForgeRock had the weakest full year guidance update in the group. The stock is up 35.9% since the results and currently trades at $22.52.

Read our full analysis of ForgeRock's results here.

Palo Alto Networks (NYSE: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 $1.31 billion, up 29.5% year on year, beating analyst expectations by 2.74%. It was a strong quarter for the company, with a solid top line growth and revenue guidance for the next quarter above analysts' estimates.

The stock is up 32% since the results and currently trades at $628.10.

Read our full, actionable report on Palo Alto Networks 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 $255.5 million, up 62.7% year on year, beating analyst expectations by 5.66%. It was an impressive quarter for the company, with an exceptional revenue growth.

The stock is down 4.38% since the results and currently trades at $252.11.

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

The author has no position in any of the stocks mentioned