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Winners And Losers Of Q1: Zscaler (NASDAQ:ZS) Vs The Rest Of The Cybersecurity Stocks


Kayode Omotosho /
2022/06/15 4:16 am EDT
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Looking back on cybersecurity stocks' Q1 earnings, we examine this quarters’ best and worst performers, including Zscaler (NASDAQ:ZS) 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 10 cybersecurity stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.71%, while on average next quarter revenue guidance was 2.04% above consensus. There has been a stampede out of high valuation technology stocks, but cybersecurity stocks held their ground better than others, with share price down 8.5% since earnings, on average.

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 $286.8 million, up 62.5% year on year, beating analyst expectations by 5.64%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.

"Enterprises continue to consolidate point products in favor of our integrated Zero Trust security platform, resulting in larger, multi-year commitments to Zscaler. We delivered 63% revenue growth and 54% billings growth, while also generating a strong free cash flow margin of 15% for the third quarter. As a result of increasing demand, we are also raising our fiscal year guidance on all financial metrics,” said Jay Chaudhry, Chairman and CEO of Zscaler.

Zscaler Total Revenue

The stock is up 0.64% since the results and currently trades at $143.04.

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

Best 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 $78.2 million, up 109% year on year, beating analyst expectations by 4.83%. It was a very strong quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.

SentinelOne Total Revenue

SentinelOne scored the fastest revenue growth and highest full year guidance raise among its peers. The company added 71 enterprise customers paying more than $100,000 annually to a total of 591. The stock is down 12.6% since the results and currently trades at $21.51.

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

Slowest Q1: ForgeRock (NYSE:FORG)

Founded in Norway by former Sun Microsystems engineers, ForgeRock (NYSE:FORG) offers software as a service that helps companies secure and manage the identity of their customers and employees.

ForgeRock reported revenues of $48 million, up 13.4% year on year, beating analyst expectations by 3.35%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.

ForgeRock had the slowest revenue growth and weakest full year guidance update in the group. The stock is up 16.3% since the results and currently trades at $16.65.

Read our full analysis of ForgeRock's results here.

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 $159.3 million, up 29.3% year on year, beating analyst expectations by 3.82%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.

The stock is down 24.5% since the results and currently trades at $41.88.

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

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 $487.8 million, up 61% year on year, beating analyst expectations by 5.05%. It was a strong quarter for the company, with an exceptional revenue growth and guidance for the next quarter above analysts' estimates.

The company added 1,620 customers to a total of 17,945. The stock is down 7.48% since the results and currently trades at $161.

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

The author has no position in any of the stocks mentioned