The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Tenable (NASDAQ:TENB) and the rest of the cybersecurity stocks fared in Q1.
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 weaker Q1; on average, revenues beat analyst consensus estimates by 0.65%, while on average next quarter revenue guidance was 1.16% 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 the share prices up 1.04% since the previous earnings results, on average.
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 $188.8 million, up 18.5% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
"Our ability to deliver strong operating income and cash flow in the quarter and reaffirm both for the full year is a notable accomplishment in this market," said Amit Yoran, Chairman and CEO of Tenable.
The stock is down 8.47% since the results and currently trades at $41.6.
Is now the time to buy Tenable? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $692.6 million, up 42% year on year, beating analyst expectations by 2.42%. Despite the stock dropping on the results, it was a decent quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter ahead of expectations.
CrowdStrike delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 5.07% since the results and currently trades at $151.9.
Is now the time to buy CrowdStrike? Access our full analysis of the earnings results here, it's free.
Weakest 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 $133.4 million, up 70.5% year on year, missing analyst expectations by 2.36%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
SentinelOne pulled off the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates in the group. The company added 12 enterprise customers paying more than $100,000 annually to a total of 917. The stock is down 27.4% since the results and currently trades at $15.06.
Founded during the aftermath of the financial crisis in 2009, Okta (NASDAQ:OKTA) is a cloud-based software as a service platform that helps companies manage identity for their employees and customers.
Okta reported revenues of $518 million, up 24.8% year on year, beating analyst expectations by 1.43%. It was a decent quarter for the company, with optimistic revenue guidance for the next quarter. The key negative was that cRPO (current remaining performance obligations) guidance for the next quarter was below, and since this is a leading indicator of revenue, it seemed to drive the narrative and stock action.
The stock is down 19.5% since the results and currently trades at $73.3.
Palo Alto Networks (NASDAQ: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 $1.72 billion, up 24.1% year on year, in line with analyst expectations. The company delivered a strong "beat and raise" quarter, with third-quarter sales meeting analysts' estimates and billings surpassing Consensus projections.
The stock is up 27.3% since the results and currently trades at $241.65.
The author has no position in any of the stocks mentioned