As cybersecurity stocks’ Q4 earnings season wraps, let's dig into this quarter's best and worst performers, including SentinelOne (NYSE:S) 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 8 cybersecurity stocks we track reported a slower Q4; on average, revenues beat analyst consensus estimates by 2.33%, while on average next quarter revenue guidance was 0.06% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but cybersecurity stocks held their ground better than others, with the share prices up 2.02% since the previous earnings results, on average.
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 $126.1 million, up 92.1% year on year, beating analyst expectations by 1.13%. It was a mixed quarter for the company, with a significant improvement in gross margin but a full year guidance missing analysts' expectations.
“We continued to deliver leading growth and margin improvement, a result of stronger execution and our competitive position. Our ARR crossed half a billion dollars, and our global customer-base exceeded 10,000 - two major milestones. Our sights are set much higher,” said Tomer Weingarten, CEO of SentinelOne.
SentinelOne achieved the fastest revenue growth but had the weakest full year guidance update of the whole group. The company added 78 enterprise customers paying more than $100,000 annually to a total of 905. The stock is up 3.25% since the results and currently trades at $14.93.
Read our full report on SentinelOne here, it's free.
Best Q4: Zscaler (NASDAQ:ZS)
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 $387.6 million, up 51.7% year on year, beating analyst expectations by 6.26%. Despite the stock dropping on the results, it was a very strong quarter for the company, with exceptional revenue growth and a solid beat of analyst estimates.
Zscaler scored the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 15.8% since the results and currently trades at $112.99.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
Weakest Q4: Rapid7 (NASDAQ:RPD)
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 $184.5 million, up 21.7% year on year, beating analyst expectations by 2.72%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.
The stock is down 20.7% since the results and currently trades at $40.82.
Read our full analysis of Rapid7's results here.
Qualys (NASDAQ:QLYS)
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 $130.8 million, up 19.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and the full year.
Qualys had the slowest revenue growth among the peers. The stock is up 1.01% since the results and currently trades at $123.5.
Read our full, actionable report on Qualys here, it's free.
Okta (NASDAQ:OKTA)
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 $510 million, up 33.2% year on year, beating analyst expectations by 4.2%. It was a mixed quarter for the company, with strong top line growth but underwhelming guidance for the next year.
The stock is up 18.5% since the results and currently trades at $84.73.
Read our full, actionable report on Okta here, it's free.
The author has no position in any of the stocks mentioned