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 Q4.
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 strong Q4; on average, revenues beat analyst consensus estimates by 5.66%, while on average next quarter revenue guidance was 3.48% above consensus. Tech stocks have been under pressure since the end of last year, but cybersecurity stocks held their ground better than others, with the share price up 11.5% 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 $1.31 billion, up 29.5% year on year, beating analyst expectations by 2.74%. It was a decent quarter for the company, with a strong top-line growth and revenue guidance for the next quarter above analysts' expectations.
"In Q2, our company continued to benefit from strength across our three security platforms, driven by strong cybersecurity demand, organizations architecting for hybrid work and growing their hyperscale cloud footprints," said Nikesh Arora, chairman and CEO of Palo Alto Networks.
The stock is up 26.7% since the results and currently trades at $602.50.
Is now the time to buy Palo Alto Networks? Access our full analysis of the earnings results here, it's free.
Best Q4: 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 $135.5 million, up 31.2% year on year, beating analyst expectations by 19.1%. It was an exceptional quarter for the company, with a significant improvement in gross margin and an impressive beat of analyst estimates.
SailPoint pulled off the strongest analyst estimates beat among its peers. The stock is up 55.4% since the results and currently trades at $64.28.
Is now the time to buy SailPoint? Access our full analysis of the earnings results here, it's free.
Weakest Q4: 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 $47.9 million, up 19.3% year on year, beating analyst expectations by 1.69%. It was a weak quarter for the company, with a decline in gross margin and underwhelming revenue guidance for the next quarter.
ForgeRock had the weakest full year guidance update in the group. The stock is up 22.5% since the results and currently trades at $20.31.
Founded in 2000 with the idea that network security comes before endpoint security, 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 $151.6 million, up 34% year on year, beating analyst expectations by 3.94%. It was a mixed quarter for the company, with a decline in gross margin but full-year guidance beating analysts' expectations.
The company added 374 customers to a total of 10,283. The stock is up 4.8% since the results and currently trades at $105.17.
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 $109.7 million, up 15.8% year on year, beating analyst expectations by 1.2%. It was a decent quarter for the company, with top-line results slightly above estimates and very strong guidance for the next year.
Qualys had the weakest performance against analyst estimates and slowest revenue growth among the peers. The stock is up 2.59% since the results and currently trades at $138.15.
The author has no position in any of the stocks mentioned