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4 Stocks to Benefit From the Rising Need for Cybersecurity

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·4 min read
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When coronavirus took hold last year, organizations around the world became dependent on cloud-based services to continue their operations. Although this allowed organizations to work remotely, it also increased the risk of cyberattacks, making it essential to implement cybersecurity measures to protect important data.

Cyberattackers are continuously evolving their methods and hence, it is important for organizations to remain wary and continue to protect sensitive information. In fact, per Check Point Research’s Cyber Attack Trends: 2021 Mid-Year Report, cyberattacks against organizations globally increased 29% in the first half of 2021.

Cyberattack incidents like the attack on SolarWinds last year or the ransomware attack on Colonial Pipeline in 2021 highlighted the rising requirement for cybersecurity. Adding to that, on Jul 2, Kaseya reported a supply-chain ransomware attack on its virtual system administrator software. To combat the problem, on Aug 25, at a cybersecurity summit hosted in the White House, technology heavyweights like Microsoft and Google committed to investing billions of dollars for strengthening cybersecurity measures as well as training individuals in cybersecurity. On Jul 28, President Joe Biden signed a new National Security Memorandum for improving cybersecurity measures to protect the critical infrastructure of the United States.

Even individuals are at risk of being subjected to cyberattacks as the usage of smartphones and other connected smart devices continue to rise globally. Personal information including payment details is stored on cloud-based servers, leaving them at risk of being stolen and causing harm to individuals.

Reflective of the growing importance that cybersecurity seems to be garnering, it is only expected that the cybersecurity market will continue to grow as organizations and governments look to strengthen such measures. According to a report by Research and Markets, the global cybersecurity market is estimated to witness a CAGR of 9.7% from 2021 to 2026, as mentioned in a Business Wire article.

4 Stocks to Watch

As the threat of cyberattacks continues to evolve, governments and organizations will look to stay vigilant against such threats and adopt cybersecurity measures, allowing the cybersecurity market to grow. This seems then an opportune moment to look at companies that provide cybersecurity solutions and stand to benefit going forward. We have selected four such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qualys, Inc.’s QLYS integrated suite of information technology (“IT”), security and compliance solutions delivered on its Qualys Cloud Platform, enables customers to identify and manage IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, and so on. In second-quarter 2021, the company introduced Cybersecurity Asset Management which helps security teams inventory their IT ecosystem, detect security gaps, and so on, by leveraging vital context from the Qualys Cloud Platform.

Shares of Qualys have risen 30.4% over the past six months and it currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 10.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 5.2%.

Radware Ltd. RDWR, together with its subsidiaries, develops, manufactures, and markets cybersecurity and application delivery solutions for applications in physical, virtual, cloud, and software defined data centers worldwide.

Shares of Zacks Rank #2 Radware have risen 28.3% year to date. The Zacks Consensus Estimate for its current-year earnings increased 6.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 20.3%.

CrowdStrike Holdings, Inc. CRWD provides cloud-delivered solutions for endpoint and cloud workload protection. On Mar 5, CrowdStrike announced that it had completed the acquisition of Humio which provides high-performance cloud log management, by paying $352 million in cash and $40 million in stock and options. On Jul 28, the company introduced, Falcon X Recon+ which increases the effectiveness of security teams.

Shares of CrowdStrike have risen 28.7% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 2.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 51.9%.

Palo Alto Networks, Inc. PANW provides cybersecurity platform solutions worldwide. On Aug 12, the company announced that Prisma Access achieved the Federal Risk and Authorization Management Program Moderate Authorization. This will allow Prisma Access to aid U.S. government agencies in securing their distributed workforce.

Shares of Palo Alto Networks have risen 30.2% year to date. The Zacks Consensus Estimate for its current-year earnings increased 1.7% over the past 60 days. This Zacks Rank #3 company’s expected earnings growth rate for the current year is 17.8%.


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Radware Ltd. (RDWR) : Free Stock Analysis Report
 
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