As businesses are transitioning to cloud software and internet-based services and software for their day-to-day operations, the need for cybersecurity is now more than ever. With increasing cyber-attacks worldwide, government initiatives have been placed to counteract the losses, proving the unquestionable need to strengthen cybersecurity.
Amid this backdrop, investors could scoop up shares of fundamentally stable cybersecurity stocks, Check Point Software Technologies Ltd. (CHKP), OneSpan Inc. (OSPN), and Radware Ltd. (RDWR) to secure their portfolio’s future.
Data breaches, cyber-attacks, and ransomware incidents have been steadily increasing. With widespread internet connectivity, attackers have relentlessly inflicted millions of dollars in losses for organizations. Small businesses are a primary target, with 41% of them having faced a cyber threat, making cybersecurity essential for businesses of all sizes.
The United States has been especially impacted, experiencing 59% of all ransomware attacks worldwide. This makes the United States the region most affected by such attacks. The severity of the situation calls for robust cybersecurity measures to protect against these ongoing threats and safeguard national interests.
To combat this rise in cyber-attacks, the government has stepped in to mitigate the damage. For fiscal year 2025, the U.S. government has proposed $13 billion in funding across civilian departments and agencies, including a $3 billion allocation for the Cybersecurity and Infrastructure Security Agency (CISA), an increase of $103 million from last year.
The need for stronger cybersecurity is urgent. With investments pouring in from both organizations and the government, the cybersecurity market is thriving. A study by Fortune Business Insights projects that the global cybersecurity market will reach $562.72 billion by 2032, with a CAGR of 14.3%.
Now let us dive deep into the fundamentals of three Software - Security stocks, starting with #3.
Stock #3: Check Point Software Technologies Ltd. (CHKP)
Headquartered in Tel Aviv, Israel, CHKP is involved in developing, marketing and supporting products and services for IT security globally. Its offerings include multilevel security architecture, cloud, network, mobile devices, endpoints information, and IOT solutions.
On October 1, CHKP announced the completion of acquisition of Cyberint Technologies Ltd., a provider of external risk management solutions. With this acquisition, CHKP can benefit by expanding its threat prevention capabilities of the Infinity platform, enhancing the company’s market reach, and enabling stable growth prospects.
On September 2, CHKP announced the unveiling of its innovative portal designed for both managed security service providers (MSSPs) and distributors. With an increasing MSSP market, this new platform can increase the ease of doing business with the company and enhance its revenue streams.
For the fiscal 2024 third quarter that ended on September 30, CHKP’s total revenues increased 6.5% year-over-year to $635.10 million. Its non-GAAP operating income grew 1.9% from the prior year’s quarter to $274 million.
Additionally, the company’s non-GAAP net income and non-GAAP EPS rose 5.4% and 8.7% from its year-ago values to $255.40 and $2.25, respectively.
Analysts expect CHKP’s revenue for the fiscal fourth quarter (ending December 2024) to increase 5.3% year-over-year to $698.43 million. Its EPS is expected to grow 3.3% from the prior year’s period to $2.65. Moreover, the company surpassed the consensus revenue and EPS estimates in three of the four trailing quarters.
Shares of CHKP have surged 12.6% over the past six months and 24.3% over the past year to close the last trading session at $170.18.
CHKP’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CHKP has an A grade for Quality. It is ranked #4 out of 20 stocks in the B-rated Software - Security industry.
To check the stock’s ratings for Growth, Value, Sentiment, Momentum, and Stability, click here.
Stock #2: OneSpan Inc. (OSPN)
OSPN engages in designing, developing, and marketing digital solutions for identity, authentication, and secure digital agreements globally. Its offerings include OneSpan Sign, OneSpan Cloud Authentication, OneSpan Identity Verification, Mobile Security Suite, Digipass Authenticators etc.
On November 4, OSPN announced the availability of its new Ready for Guidewire integrations in the Guidewire marketplace to drive cloud adoption within the P&C sector. This new release will allow P&C insurance carriers to launch faster with less complexity and operational burden while also paving the way toward its transition to the cloud.
On June 11, OSPN announced the launch of the OneSpan Integration Platform, a platform that helps businesses to integrate eSignatures into well-known applications more efficiently.
As eSignatures are becoming the norm for more and more businesses worldwide, this new launch will enhance the company’s growth prospects by creating a significant market share.
For the fiscal 2024 third quarter that ended on September 30, OSPN’s total revenue came in at $56.24 million. Its adjusted EBITDA increased 165.3% year-over-year to $16.73 million. Moreover, the company’s non-GAAP net income and non-GAAP net income per share grew 266.1% and 266.7%, respectively, from the prior year’s quarter to $13.10 million and $0.33.
Street expects OSPN’s revenue and EPS for the fiscal year ending December 2025 to grow 3.4% and 3.1% year-over-year to $248.33 million and $1.34, respectively. Moreover, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
OSPN’s shares have surged 34.6% over the past six months and 98.3% over the past year to close the last trading session at $16.68.
OSPN’s solid prospects are projected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
OSPN has an A grade for Value and a B for Growth and Quality. It is ranked #2 within the same industry.
Click here to see OSPN’s ratings for Momentum, Sentiment, and Stability.
Stock #1: Radware Ltd. (RDWR)
Based in Tel Aviv, Israel, RDWR is engaged in developing, manufacturing and marketing cyber security and application delivery solutions for cloud, on-premises, and software defined data centers. Its two operational segments are: Radware's Core Business and The Hawks' Business.
On October 3, RDWR announced the introduction of a new Threat Intelligence Service made to help security operation center (SOC) teams, threat researchers, and incident responders increase threat detection, identify compromised systems, and ultimately lower mean time to response.
With developments in intelligent security software worldwide, this new release by the company will enhance the company’s market share in the cybersecurity market and offer better growth prospects.
On September 18, RDWR announced the closing of a multi-million-dollar expansion deal with a leading European stock exchange to include its Radware DDoS Protection Services and DefensePro® X and Cyber Controller as well as its Emergency Response Team (ERT) managed services.
With this expansion agreement, RDWR is proving to be a cybersecurity giant worldwide and gaining a significant number of customers and enhancing its growth.
For the fiscal 2024 third quarter that ended on September 30, RDWR’s revenues increased 12.8% year-over-year to $69.49 million. Its non-GAAP gross profit grew 14.5% from its year-ago value to $57.17 million.
Additionally, the company’s non-GAAP net income and non-GAAP net earnings per share rose 256.9% and 228.6% from the prior year’s quarter to $10.21 million and $0.23, respectively.
The consensus revenue estimate of $71.36 million for the fiscal fourth quarter (ending December 2024) reflects a year-over-year rise of 9.7%. Its EPS for the same period is expected to increase 82.1% from the prior year’s period to $0.24. The company also surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
RDWR’s stock has surged 28.4% over the past six months and 45.3% over the past year to close the last trading session at $21.63.
RDWR’s POWR Ratings reflect its strong outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
RDWR has an A grade for Quality and Growth and a B for Sentiment. It has topped the 20-stock Software - Security industry.
To check RDWR’s Value, Momentum, and Stability ratings, click here.
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CHKP shares were unchanged in premarket trading Tuesday. Year-to-date, CHKP has gained 11.38%, versus a 21.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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