Looking back on cybersecurity stocks' Q1 earnings, we examine this quarters’ best and worst performers, 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 decent Q1; on average, revenues beat analyst consensus estimates by 3.71%, while on average next quarter revenue guidance was 2.04% above consensus. The whole tech sector has been facing a sell-off since late last year, but cybersecurity stocks held their ground better than others, with share price down 2.28% since earnings, on average.
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 $157.3 million, up 33.9% year on year, beating analyst expectations by 2.1%. It was a mixed quarter for the company, with a strong top line growth but decelerating customer growth.
“Rapid7’s strong start to the year was driven by on-going momentum across our security transformation and vulnerability management solutions, as we sustained year-over-year ARR growth of 38%,” said Corey Thomas, Chairman and CEO of Rapid7.
The stock is down 32.8% since the results and currently trades at $63.64.
Best Q1: SentinelOne (NYSE:S)
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 $78.2 million, up 109% year on year, beating analyst expectations by 4.83%. It was a very strong quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.
SentinelOne pulled off the fastest revenue growth and highest full year guidance raise among its peers. The company added 71 enterprise customers paying more than $100,000 annually to a total of 591. The stock is down 6.61% since the results and currently trades at $23.
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Slowest Q1: 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 $48 million, up 13.4% year on year, beating analyst expectations by 3.35%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
ForgeRock had the slowest revenue growth and weakest full year guidance update in the group. The stock is up 51.9% since the results and currently trades at $21.75.
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 $115.4 million, up 27.1% year on year, beating analyst expectations by 3.2%. It was a mixed quarter for the company, with a decent beat of topline results, but a decline in gross margin.
SailPoint has previously entered into a definitive agreement to be acquired by Thoma Bravo, a leading software investment firm, in an all-cash transaction that values SailPoint at approximately $6.9 billion.
The stock is down 3.02% since the results and currently trades at $61.92.
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 $159.3 million, up 29.3% year on year, beating analyst expectations by 3.82%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.
The stock is down 16% since the results and currently trades at $46.60.
The author has no position in any of the stocks mentioned