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Spotting Winners: SailPoint (NYSE:SAIL) And Cybersecurity Stocks In Q3


Adam Hejl /
2022/01/24 6:13 am EST
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As we reflect back on the just completed Q3 cybersecurity sector earnings season, we dig into the relative performance of SailPoint (NYSE:SAIL) 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 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. Tech stocks have been under pressure since the end of last year and while some of the cybersecurity stocks have fared somewhat better, they have not been spared, with share price declining 16.9% since earnings, on average.

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 mixed quarter for the company, with revenue guidance for the next quarter missing analyst estimates and a decline in gross margin.

“SailPoint delivered another excellent quarter, highlighted by 44% total ARR growth and 39% subscription revenue growth. Demand for our SaaS and subscription-based identity security offerings continues to be very strong as global enterprises recognize that SailPoint’s modern identity security solutions are core to their next-generation technology stack,” said Mark McClain, SailPoint CEO and Founder.

SailPoint Total Revenue

The stock is down 17.6% since the results and currently trades at $39.69.

Read our full report on SailPoint 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 pulled off 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 21.3% since the results and currently trades at $40.25.

Is now the time to buy SentinelOne? Access our full analysis of the earnings results 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 stock is up 6.22% since the results and currently trades at $79.72.

Read our full analysis of Mimecast's results here.

Palo Alto Networks (NYSE:PANW)

Founded in 2005 by a cybersecurity engineer Nir Zuk, Palo Alto Networks (NYSE:PANW) 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 stock is down 6.99% since the results and currently trades at $483.63.

Read our full, actionable report on Palo Alto Networks here, it's free.

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 $139.8 million, up 33.1% year on year, beating analyst expectations by 4.28%. It was a strong quarter for the company, with accelerating customer growth.

The company added 594 customers to a total of 9,909. The stock is down 28.4% since the results and currently trades at $91.85.

Read our full, actionable report on Rapid7 here, it's free.

The author has no position in any of the stocks mentioned