Cyber Security Companies Stocks

Cyber Security Companies Stocks

6 min read

Are you looking for cyber security companies stocks to trade? There are quite a few you can look into. Working from home doesn’t seem to be going away any time soon. In fact, we’ve learned we don’t need to be in an office to be productive. And it’s changed how we work. Which means we need a secure network.

Chart by TradingView.

With every high profile digital security breach, like that of the Colonial Pipeline who agreed to pay $4.4 million in ransom to the criminals who shut down their operations, two things are the result.

This result will push more hackers to find vulnerabilities in companies‘ networks and systems to gain in similar ways. The need for cybersecurity will increase. And the value of effective cybersecurity companies goes up.

The primary purpose of cybersecurity is to protect electronic data from damage or theft.  This security is accomplished through a system of procedures, hardware, and software. 

Cybersecurity securities companies stocks will focus mainly on the hardware and software side of this process to ensure the safety of private users, a company’s, or even governmental data. 

The three largest cybersecurity companies by revenue are NortonLifeLock, McAfee, and Palo Alto Networks, none of which made any of our lists. If you want to invest in cybersecurity companies and wish to easily diversify, there are three ETFs in the sector:

  • First Trust NASDAQ Cybersecurity ETF (CIBR)
  • Global X Cybersecurity ETF (BUG)
  • iShares Cybersecurity and Tech ETF (IHAK)

ETFMG Prime Cyber Security ETF (HACK).

The Nasdaq CTA Cybersecurity Index (NQCYBR) tracks the industry and is up 38% over the past year (as of May 21, 2021), with the S&P up 44% for the same period. 

We’ve broken our list of cybersecurity stocks into Growth, Value, and Momentum stocks, there s some overlap of stocks in more than one category.  These companies are all major players in cybersecurity but may be broader network solutions companies as well.  The NQCYBR has a broader range of stocks that make up its composition. 

Top 3 Growth Cyber Securities Companies Stocks

The following cyber securities companies stocks have the greatest change in YOY EPS.  This metric change indicates that the company is producing money that can be invested or returned to shareholders. 

CACI International Inc.: CACI International is not just a cybersecurity play but a world-class information technology products, solutions, and services company. They provide both information assurance and security as well as systems integration, reengineering, electronic commerce, and related services. By looking at a full company’s IT systems, they can design robust cybersecurity infrastructure.

Fortinet Inc.: Fortinet is a focused network IT security company that offers solutions to various enterprises, service providers, and government organizations’ cybersecurity needs. Their systems utilize multiple security technologies, including antivirus, antispam, firewall, VPN, intrusion prevention, and more. Fortinet saw their net income climb by 24.1% YOY for Q4 2020. While its revenues grew by 21.0% YOY. This due to increased billings. 

Booz Allen Hamilton Holding Corp. is another technology and management consulting services company similar to CACI. The company provides the highest level analytics, digital, engineering, and cyber solutions, among other services. It serves customers that include the US Government and multinational corporations around the world.

What Are the Best Cybersecurity Stocks?

The following cybersecurity stocks have the lowest one-year trailing P/E (price to earnings) ratio. This metric is valuable because profits can be used as dividends or for stock buybacks. With a low P/E ratio, the profit generated is greater for each dollar spent on the stock price paid. 

CACI International also leads the value list (see more information about CACI in growth stocks). Over the past year, CACI’s price has only increased from 230 to 247 per share.

Ribbon Communications Inc. is also a network solutions provider that focuses on companies in the communications services sector. It offers policy and routing servers, cloud, mobility solutions, media and signaling gateways, and more. Ribbon Coms reported a net income of $124 million for Q4 2020. And a net loss of $150 million in Q4 2019. This turnaround is primarily due to a 51.6% year-over-year (YOY) increase in quarterly revenue. A significant portion of this revenue increase is due to its acquisition of ECI Telecom Group, Ltd. That deal concluded on March 3, 2020.

Check Point Software Technologies Ltd. developes and manufacturers both software and hardware products focused on cyber and IT security. Beyond management solutions, Check Point also provides protection for networks, gateways, data, and endpoints. For Q4 2020, Check Point’s income fell 0.6% YOY. But their revenues increased by 3.7%. Check Point stated in their Q4 results that they’re seeing growth in their cloud networking and remote access security during the quarter.

Best Momentum Cybersecurity Stocks

The following cybersecurity stocks have seen the best returns over the past year. This metric can be good if you believe that money will continue to follow. 

CrowdStrike Holdings Inc. is a holding company with subsidiaries offering a robust cybersecurity platform. They provides a range of products. This includes antivirus, endpoint detection. As well as response, device control, vulnerability management, and threat intelligence, among others. CrowdStrike’s stock price has gone from approximately $80 to 210/share(up 162%) in the past year. On March 5, CrowdStrike completed its acquisition of Humio. Which brings to CS a high-performance cloud log management, and observability technology capability. The acquisition was for approximately $352 million in cash and $40 million in stock and options. The CS stock price at the time of this deal was $183/share.

Zscaler Inc. is a company providing security software and related services. They have a cloud-based web and mobile security platform available that’s designed to also address cloud application visibility, threat protection, and other networking challenges. Zscaler’s stock price has gone from 75 to 170.32/share in the past year.  Their most recent quarter, which ended January 31, saw Zscaler reporting a net loss of $67.5 million compared to its prior-year net loss of $29.2 million. However, it did see a 55.1% YOY growth in its revenues. In its earnings results, the company attributed part of its increased revenue growth to an acceleration of its ongoing digital transformation strategy.

Cloudflare Inc. is an application software company. Among Cloudflare’s offerings are solutions for cybersecurity, analysis, domain registration, load balancing, and video streaming.Cloudflare’s stock price has gone from 28 to 74.91/share in the past year after a first-quarter earnings announcement where the CEO stated they now have over 4 million customers, with large customers accounting for more than half their revenue. 

Final Thoughts

We hope this list of cyber security companies stocks can help you with your investing decisions. Remember, never put at risk more than you can lose and good luck with your trades!

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