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Cybersecurity Stocks Q1 In Review: Tenable (NASDAQ:TENB) Vs Peers


Radek Strnad /
2024/07/04 8:55 am EDT

Let's dig into the relative performance of Tenable (NASDAQ:TENB) 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. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and cybersecurity stocks have held roughly steady amidst all this, with share prices up 4.6% on average since the previous earnings results.

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 $216 million, up 14.4% year on year, topping analysts' expectations by 1.2%. It was a slower quarter for the company, with a miss of analysts' billings estimates.

"We delivered strong results for the first quarter, highlighted by 14% revenue growth and 17% operating margin driven by traction in our unified platform," said Amit Yoran, Chairman and CEO of Tenable.

Tenable Total Revenue

The stock is down 3.8% since the results and currently trades at $43.31.

Is now the time to buy Tenable? Access our full analysis of the earnings results 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 scored the biggest analyst estimates beat among its peers. The stock is up 27.7% since the results and currently trades at $198.6.

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

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.

Rapid7 had the weakest full-year guidance update in the group. The company lost -64 customers and ended up with a total of 11,462. The stock is down 8.1% since the results and currently trades at $42.1.

Read our full analysis of Rapid7'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. It was a mixed quarter for the company, with a decline in its gross margin and full-year revenue guidance missing analysts' expectations.

Varonis had the slowest revenue growth among its peers. The stock is up 6.6% since the results and currently trades at $47.58.

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. 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 5.3% since the results and currently trades at $341.15.

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

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