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Cybersecurity Stocks Q3 Recap: Benchmarking Palo Alto Networks (NYSE:PANW)


Adam Hejl /
2022/01/12 5:57 am EST
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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 have a look at how Palo Alto Networks (NYSE:PANW) and the rest of the cybersecurity stocks fared in Q3.

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 11 cybersecurity stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 6.26%, while on average next quarter revenue guidance was 2.62% above consensus. The technology sell-off has been putting pressure on stocks since November, but cybersecurity stocks held their ground better than others, with share price down 8.51% since earnings, on average.

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 $1.24 billion, up 31.8% year on year, beating analyst expectations by 3.58%. It was a decent quarter for the company, with a strong top line growth but a decline in gross margin.

"The combination of strong top-line metrics, upside to our profitability goals, and cash conversion for Q1 showcase our focus on total shareholder return," said Dipak Golechha, chief financial officer of Palo Alto Networks.

Palo Alto Networks Total Revenue

The stock is up 1.08% since the results and currently trades at $525.63.

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

Best Q3: 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 $56 million, up 128% year on year, beating analyst expectations by 12.9%. It was a stunning quarter for the company, with a significant improvement in gross margin and an impressive beat of analyst estimates.

SentinelOne Total Revenue

SentinelOne delivered 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 416. The stock is down 11% since the results and currently trades at $45.50.

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

Slowest Q3: SailPoint (NYSE:SAIL)

Started by Mark McClain after his previous identity management company got acquired by Sun Microsystems, SailPoint (NYSE:SAIL) provides software for organizations to manage the digital identity of employees, customers, and partners.

SailPoint reported revenues of $110.1 million, up 17.1% year on year, beating analyst expectations by 5.98%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in gross margin.

The stock is down 8.65% since the results and currently trades at $44.01.

Read our full analysis of SailPoint's results here.

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 $44.2 million, up 37.6% year on year, beating analyst expectations by 15%. It was a stunning quarter for the company, with an impressive beat of analyst estimates.

ForgeRock scored the strongest analyst estimates beat among the peers. The stock is down 41.8% since the results and currently trades at $19.80.

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

Mimecast (NASDAQ:MIME)

Founded in London by South Africans Peter Bauer and Neil Murray, Mimecast (NASDAQ:MIME) provides cloud-based filtering service for securing business email accounts.

Mimecast reported revenues of $147.2 million, up 20% year on year, beating analyst expectations by 3.08%. It was a decent quarter for the company, with a very optimistic guidance for the next quarter but decelerating customer growth.

The company lost 1000 customers and ended up with a total of 39,600. The stock is up 5.83% since the results and currently trades at $79.43.

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

The author has no position in any of the stocks mentioned