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 take a look at how Tenable (NASDAQ:TENB) and the rest of the cybersecurity stocks fared in Q2.
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 mixed Q2; on average, revenues beat analyst consensus estimates by 2.01% while next quarter's revenue guidance was 0.61% below consensus. Technology stocks have been hit hard by 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 9.64% on average since the previous earnings results.
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 $195 million, up 18.7% year on year, topping analyst expectations by 2.52%. It was a solid quarter for the company, with a meaningful improvement in its gross margin and a decent beat of analysts' revenue estimates.
"We are very pleased with our Q2 results, which included better than expected top-line growth and a sizable beat in earnings," said Amit Yoran, Chairman and CEO of Tenable.
The stock is down 4.07% since the results and currently trades at $42.Is now the time to buy Tenable? Read our full report on Tenable here.
Best Q2: Okta (NASDAQ:OKTA)
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 $556 million, up 23.1% year on year, outperforming analyst expectations by 4.06%. It was a solid quarter for the company, with a decent beat of analysts' revenue estimates and strong sales guidance for the next quarter.
The stock is up 12.6% since the results and currently trades at $82.85.
Is now the time to buy Okta? Access our full analysis of the earnings results here, it's free.
Slowest Q2: 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 $115.4 million, up 3.56% year on year, falling short of analyst expectations by 3.23%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
Varonis had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is up 11.3% since the results and currently trades at $31.96.
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 $137.2 million, up 14.4% year on year, surpassing analyst expectations by 1.05%. It was a mixed quarter for the company, with an improvement in its gross margin.
The stock is up 12.7% since the results and currently trades at $155.72.
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 $455 million, up 43.1% year on year, surpassing analyst expectations by 5.67%. It was a decent quarter for the company, with a solid beat of analysts' revenue estimates but underwhelming revenue guidance for the next year.
The stock is down 1.26% since the results and currently trades at $160.79.
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The author has no position in any of the stocks mentioned