Wrapping up Q3 earnings, we look at the numbers and key takeaways for the cybersecurity stocks, including Tenable (NASDAQ:TENB) 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 8 cybersecurity stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 2.1%, while on average next quarter revenue guidance was 0.45% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but cybersecurity stocks held their ground better than others, with share prices down 4.25% since the previous earnings results, on average.
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 $174.8 million, up 26% year on year, beating analyst expectations by 2.72%. It was a mixed quarter for the company, with a decent beat of analyst estimates but underwhelming revenue guidance for the next quarter.
"We are very pleased with our performance in the third quarter, highlighted by better than expected top-line results, significant operating leverage and strong free cash flow,” said Amit Yoran, Chairman and CEO of Tenable.
The stock is up 8.05% since the results and currently trades at $37.01.
Read our full report on Tenable here, it's free.
Best Q3: 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 $355.5 million, up 54.2% year on year, beating analyst expectations by 4.33%. Despite the stock dropping on the results, it was a very strong quarter for the company, with exceptional revenue growth and very optimistic guidance for the next quarter.
Zscaler scored the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 15.8% since the results and currently trades at $121.65.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
Weakest Q3: 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 $175.7 million, up 25.6% year on year, missing analyst expectations by 0.12%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
Rapid7 had the weakest performance against analyst estimates and weakest full year guidance update in the group. The company added 167 customers to a total of 10,791. The stock is down 11.7% since the results and currently trades at $34.51.
Read our full analysis of Rapid7's results here.
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 $481 million, up 37.1% year on year, beating analyst expectations by 3.36%. It was a solid quarter for the company, with exceptional revenue growth.
The stock is up 27.8% since the results and currently trades at $68.15.
Read our full, actionable report on Okta here, it's free.
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 $115.3 million, up 105% year on year, beating analyst expectations by 3.89%. It was a decent quarter for the company, with exceptional revenue growth but a decline in net revenue retention rate.
SentinelOne scored the fastest revenue growth among the peers. The company added 72 enterprise customers paying more than $100,000 annually to a total of 827. The stock is up 3.18% since the results and currently trades at $14.59.
Read our full, actionable report on SentinelOne here, it's free.
The author has no position in any of the stocks mentioned