As we reflect back on the just completed Q2 cybersecurity sector earnings season, we dig into the relative performance of ForgeRock (NYSE:FORG) 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 9 cybersecurity stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.88%, while on average next quarter revenue guidance was 0.31% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth and cybersecurity stocks have not been spared, with share prices down 18.3% since the previous earnings results, on average.
Weakest Q2: 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 $47.6 million, up 8.47% year on year, beating analyst expectations by 1.05%. It was a weak quarter for the company, with revenue guidance for both the next quarter and full year guidance missing analysts' expectations.
“Identity remains a top priority for every modern organization in today’s shifting threat landscape and macroeconomic environment, and we continue to see strong customer demand for our enterprise-grade identity platform,” said Fran Rosch, CEO of ForgeRock.
ForgeRock delivered the slowest revenue growth and weakest full year guidance update of the whole group. The stock is down 30.3% since the results and currently trades at $15.49.
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 $102.5 million, up 124% year on year, beating analyst expectations by 7.15%. It was a very strong quarter for the company, with an exceptional revenue growth and a significant improvement in net revenue retention rate.
SentinelOne achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 164 enterprise customers paying more than $100,000 annually to a total of 755. The stock is up 0.43% since the results and currently trades at $27.42.
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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 $164.3 million, up 26.1% year on year, in line with analyst expectations. It was a slower quarter for the company, with an underwhelming revenue guidance for the next quarter.
The stock is down 17.6% since the results and currently trades at $36.82.
Palo Alto Networks (NYSE: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 $1.55 billion, up 27.1% year on year, in line with analyst expectations. It was a decent quarter for the company, with a full year guidance beating analysts' expectations.
Palo Alto Networks had the weakest performance against analyst estimates among the peers. The stock is down 65.8% since the results and currently trades at $173.45.
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 $451.8 million, up 43.2% year on year, beating analyst expectations by 4.91%. Despite the stock dropping on the fears of Auth0 integration challenges, it was a solid quarter for the company, with an exceptional revenue growth and a decent beat of analyst estimates.
The stock is down 34.7% since the results and currently trades at $59.7.
The author has no position in any of the stocks mentioned