Q3 Rundown: Palo Alto Networks (NASDAQ:PANW) Vs Other Cybersecurity Stocks
Wrapping up Q3 earnings, we look at the numbers and key takeaways for the cybersecurity stocks, including Palo Alto Networks (NASDAQ:PANW) 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 9 cybersecurity stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 2% while next quarter's revenue guidance was in line with consensus. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but cybersecurity stocks held their ground better than others, with the share prices up 17.6% on average since the previous earnings results.
Palo Alto Networks (NASDAQ:PANW)
Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.
Palo Alto Networks reported revenues of $1.88 billion, up 20.1% year on year, topping analyst expectations by 1.9%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but full-year revenue guidance missing analysts' expectations.
"An unprecedented level of attacks is fueling strong demand in the cybersecurity market," said Nikesh Arora, chairman and CEO of Palo Alto Networks.
The stock is up 12.7% since the results and currently trades at $288.7.
Is now the time to buy Palo Alto Networks? Access our full analysis of the earnings results 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 $164.2 million, up 42.4% year on year, outperforming analyst expectations by 5%. It was a strong quarter for the company, with a significant improvement in its gross margin and a solid beat of analysts' revenue estimates.
SentinelOne delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The company added 66 enterprise customers paying more than $100,000 annually to reach a total of 1,060. The stock is up 17.3% since the results and currently trades at $23.49.
Is now the time to buy SentinelOne? Access our full analysis of the earnings results here, it's free.
Slowest Q3: Varonis (NASDAQ:VRNS)
Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.
Varonis reported revenues of $122.3 million, down 0.8% year on year, falling short of analyst expectations by 2.5%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and full-year revenue guidance missing analysts' expectations.
Varonis had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is up 38.1% since the results and currently trades at $43.47.
Read our full analysis of Varonis's results here.
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 $496.7 million, up 39.7% year on year, surpassing analyst expectations by 4.9%. It was a very good quarter for the company, with a decent beat of analysts' revenue estimates and strong sales guidance for the next quarter.
The stock is up 13.6% since the results and currently trades at $218.1.
Read our full, actionable report on Zscaler here, it's free.
CrowdStrike (NASDAQ:CRWD)
Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.
CrowdStrike reported revenues of $786 million, up 35.3% year on year, surpassing analyst expectations by 1.1%. It was a decent quarter for the company, with ARR (annual recurring revenue) and revenue narrowly topping analysts' expectations. CRWD beat on non-GAAP operating income and non-GAAP EPS by a more convincing amount. While next quarter's revenue guidance was only in-line, non-GAAP operating income was head. Full year guidance was also raised.
The stock is up 25.3% since the results and currently trades at $266.11.
Read our full, actionable report on CrowdStrike here, it's free.
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The author has no position in any of the stocks mentioned
