High-profile cyberattacks keep showing up in the news. You may have been a victim yourself or know someone else who has gotten hacked, whether from your credit card or through a full battery of personal information.
About 47% of Americans experienced financial identity theft in 2020, according to Aite-Novarica Group. The U.S. Identity Theft: The Stark Reality found identity theft cases cost $502.5 billion in 2019 and losses increased 42% to $712.4 billion in 2020.
Why cybersecurity stocks, and which ones? Let's dig into this very important topic and take a look at some potentially profitable slices of equities.
Why Cybersecurity Stocks?
There's never been a better time to invest in cybersecurity stocks, nor will cybersecurity ever stop being an issue. Governments, businesses, and individuals all need cybersecurity, which involves protecting systems, networks, and programs from attacks that come digitally. Cyberbullies aim at changing, accessing, or destroying sensitive information or extorting money.
Unfortunately, cyber attackers have become more stealthy and new targets continually come to the forefront, including remote workers as a target for cybercriminals, the new Internet of Things (IoT) devices, and 5G that increases the bandwidth of connected devices.
3 Cybersecurity Stocks to Add to Your Portfolio
Which cybersecurity stocks might catch your eye? Let's go over three that you might want to consider.
Rapid7 Inc., headquartered in Boston, provides cyber security solutions with a cloud-native insight platform that customers can use for analytics-driven cyber security risk management programs. The platform includes the following:
- InsightIDR: InsightIDR is an incident detection and response solution.
- InsightCloudSec: InsightCloudSec integrates posture management, workload protection, infrastructure entitlements management, infrastructure-as-code security and more.
- InsightVM: InsightVM offers a way to collect vulnerability data, prioritize risk and automate remediation.
- InsightAppSec: InsightAppSec provides application security testing that analyzes web applications for security vulnerabilities.
- InsightConnect: InsightConnect is a security orchestration and automation response solution used by security professionals.
The company also produces various systems, including cloud security, on-premises versions, penetration testing, vulnerability risk software, professional services, and more among the following systems: DivvyCloud, Nexpose, AppSpider, and Metasploit.
The company has customers in all industries, including technology, energy, financial services, health care, and more in North and South America, Europe, the Middle East, Africa, and Asia.
Rapid7 Inc. saw full-year revenue of $535.4 million, up 30% year-over-year, and product revenue of $500.8 million, up 31% year-over-year. The company also saw total customer growth of 18% year-over-year. The company ultimately saw strong fourth-quarter results across our security transformation and vulnerability management solutions.
Palo Alto Networks Inc., headquartered in Santa Clara, California, offers worldwide cybersecurity solutions, including firewall appliances and software, subscription services for threat prevention, malware, and persistent threat services. It also offers uniform resource locator filtering, laptop, and mobile device protection as well as firewall, DNS security, IoT security, SaaS security API, and more. The company offers cloud security, security analytics, threat intelligence, and cyber security consulting, firewall migration, online and in-classroom training. It sells through channel partners and medium-to-large enterprises, service providers, and government entities.
Fiscal second-quarter revenue grew 30% year over year to $1.3 billion, compared with total revenue of $1 billion for the fiscal second quarter 2021. Billings grew 32% year over year to $1.6 billion. GAAP net loss for the fiscal second quarter 2022 was $93.5 million, or $0.95 per diluted share, compared with GAAP net loss of $142.3 million, or $1.48 per diluted share, for the fiscal second quarter 2021.
Non-GAAP net income for the fiscal second quarter 2022 was $185 million, or $1.74 per diluted share compared to $154.2 million, or $1.55 per diluted share in fiscal Q2 2021.
In fiscal Q3 2022, we expect total billings in the range of $1.59 billion to $1.61 billion, representing year-over-year growth of between 24% and 25%, and total revenue in the range of $1.345 billion to $1.365 billion. Total revenue should come in the range of $5.425 billion to $5.475 billion, representing year-over-year growth of between 27% and 29%.
NortonLifeLock Inc., headquartered in Tempe, Arizona, provides security, storage, and systems management solutions and focuses on consumer cyber safety. Avast and NortonLifeLock recently combined and showed GAAP revenue of $702 million, up 10%. Q3 2022 found GAAP diluted EPS from continuing operations was $0.34, up 17%. Q3 GAAP operating margin was 43%, down 80 basis points. Q3 operating cash flow was $330 million, up 13%, and diluted EPS of $0.44, up 16%. The company upped its bookings 10% to the tune of $752 million and had a direct customer count of 23.4 million, up 2.4 million, and free cash flow of $328 million, up 13%.
In 2022, revenue should be in the range of $2,795 to $2,805 million, or 10% growth YoY, and EPS should be in the range of $1.73 to $1.75. In addition, NortonLifeLock's Board of Directors declared a quarterly cash dividend of $0.125 per common share to be paid on March 16, 2022, to all shareholders of record as of the close of the business day on February 22, 2022.
Cybersecurity: A Worthy Investment
If there's one thing nobody loves to think about, cybersecurity is probably at the top of that list. However, attacks in 2022 continue unabated, and the most recent prolific attacks include the Colonial Pipeline, Steamship Authority of Massachusetts, JBS (the world’s largest meatpacker), and the Washington, D.C. Metropolitan Police Department.
As you're looking carefully into your cybersecurity investment options, don't forget to investigate whether you're safely protected, both in your business and through your personal accounts. Cyber thieves lurk everywhere, and it's worth a reminder no matter where you live and work.
Before you consider Rapid7, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Rapid7 wasn't on the list.
While Rapid7 currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
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