Looking back on cybersecurity stocks' Q2 earnings, we examine this quarters’ best and worst performers, including Palo Alto Networks (NYSE:PANW) and its peers.
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 9 cybersecurity stocks we track reported a a solid Q2; on average, revenues beat analyst consensus estimates by 5.51%, while on average next quarter revenue guidance was 3.94% above consensus. The market rewarded the results with the average return the day after earnings coming in at 1.18%.
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 and a full year guidance beating analysts' expectations.
"Our strong Q4 performance was the culmination of executing on our strategy throughout the year, including product innovation, platform integration, business model transformation and investments in our go-to-market organization," said Nikesh Arora, chairman and CEO of Palo Alto Networks.
The stock is up 18.6% since the results and currently trades at $464.16.
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 scored 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 $50.80.
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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 $43.91.
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 $112.64.
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 $337.6 million, up 69.7% year on year, beating analyst expectations by 4.37%. It was a strong quarter for the company, with an exceptional revenue growth.
The stock is down 3.9% since the results and currently trades at $241.
The author has no position in any of the stocks mentioned