As cybersecurity stocks’ Q1 earnings season wraps, let's dig into this quarters’ best and worst performers, including Palo Alto Networks (NYSE:PANW) 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. 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 4.52% 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 $1.38 billion, up 29.1% year on year, beating analyst expectations by 2.03%. It was a mixed quarter for the company, with a strong top line growth but a decline in gross margin.
"We saw strong top-line growth in Q3, which is a testament to our teams' consistent execution in capitalizing on the strong cybersecurity demand trends," said Nikesh Arora, chairman and CEO of Palo Alto Networks.
The stock is up 12.2% since the results and currently trades at $490.09.
Is now the time to buy Palo Alto Networks? Access our full analysis of the earnings results 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 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 7.91% since the results and currently trades at $22.68.
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 25.9% since the results and currently trades at $18.03.
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.
The stock is up 5.81% since the results and currently trades at $150.40.
Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ:QLYS) provides organizations with software to assess their exposure to cyber-attacks.
Qualys reported revenues of $113.4 million, up 17.2% year on year, in line with analyst expectations. It was a decent quarter for the company, with revenue guidance for the next quarter roughly in line with analysts' expectations.
Qualys had the weakest performance against analyst estimates among the peers. The stock is down 12.4% since the results and currently trades at $121.31.
The author has no position in any of the stocks mentioned