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Cybersecurity Stocks Q2 Results: Zscaler (NASDAQ:ZS) Vs The Rest Of The Pack


Kayode Omotosho /
2021/10/04 8:07 am EDT
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As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today we are looking at the cybersecurity stocks, starting with Zscaler (NASDAQ:ZS).

Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks. The migration of businesses to the cloud and employees working remotely in insecure environments are also contributing to increasing demand for modern cybersecurity software. Companies are moving to cloud-based network security software, because they offer better performance and are typically cheaper than maintaining the traditional on-premise solutions, which often include buying specialized hardware like firewalls.

The 10 cybersecurity stocks we track reported a a strong Q2; on average, revenues beat analyst consensus estimates by 5.66%, while on average next quarter revenue guidance was 4.49% above consensus. The market rewarded the results with the average return the day after earnings coming in at 0.17%.

Zscaler (NASDAQ:ZS)

Founded in 2007 by Jay Chaudhry, Zscaler (NASDAQ:ZS) offers software as a service that helps companies securely connect to applications and networks in the cloud.

Zscaler reported revenues of $197 million, up 56.5% year on year, beating analyst expectations by 5.13%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.

"We delivered outstanding results for the fourth quarter, with a record number of large deals across diverse sectors driving 57% revenue growth and 70% billings growth year over year, finishing the fiscal year with strong business momentum," said Jay Chaudhry, Chairman and CEO of Zscaler.

Zscaler Total Revenue

The stock is down 3.35% since the results and currently trades at $259.34.

We think Zscaler is a good business, but is it a buy today? Read our full report here, it's free.

Best Q2: 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 $45.7 million, up 121% year on year, beating analyst expectations by 13.3%. It was an exceptional quarter for the company, with an impressive beat of analyst estimates and a strong revenue growth.

SentinelOne Total Revenue

SentinelOne achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is down 3.11% since the results and currently trades at $55.03.

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

Weakest Q2: SailPoint (NYSE:SAIL)

Founded in 2005 by Kevin Cunningham and Mark McClain, SailPoint (NYSE:SAIL) provides software for organizations to manage the digital identity of employees, customers, and partners.

SailPoint reported revenues of $102.4 million, up 10.8% year on year, beating analyst expectations by 3.2%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.

SailPoint had the slowest revenue growth and weakest full year guidance update in the group. The stock is down 8.92% since the results and currently trades at $42.70.

Read our full analysis of SailPoint's results here.

Palo Alto Networks (NYSE:PANW)

Founded in 2005, Palo Alto Networks makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches and malware threats.

Palo Alto Networks reported revenues of $1.21 billion, up 28.2% year on year, beating analyst expectations by 3.95%. It was an impressive quarter for the company, with a very strong guidance for the next year.

The stock is up 18.6% since the results and currently trades at $494.99.

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

Rapid7 (NASDAQ:RPD)

Founded in 2000, 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 $126.4 million, up 27.8% year on year, beating analyst expectations by 2.7%. It was a very strong quarter for the company, with accelerating customer growth.

The stock is down 2.33% since the results and currently trades at $113.68.

Read our full, actionable report on Rapid7 here, it's free.

The author has no position in any of the stocks mentioned