The accelerated shift to remote working and the rapid digitization across several industries have propelled greater exposure to cyber threats. Moreover, the high-profile cyber attacks from the last year have resulted in greater demand for effective security infrastructures. According to Statista, the global average cost of data breaches came in at $4.24 million in 2021, up from $3.86 million in the previous year.
In November 2021, President Biden signed the infrastructure bill into law which designates nearly $2 billion to improve cybersecurity for critical infrastructure. In addition, he also signed a memorandum yesterday to strengthen the cybersecurity of the defense and intelligence communities’ networks. Governments and private organizations worldwide are spending significantly on cyber security solutions. Analysts expect the global cyber security market to grow at a CAGR of 10.9% by 2028.
Therefore, fundamentally sound cybersecurity stocks Check Point Software Technologies (CHKP), NortonLifeLock Inc. (NLOK), and Qualys, Inc. (QLYS) could be solid additions to your portfolio.
Check Point Software Technologies Ltd. (CHKP)
CHKP develops and markets a range of products and services for IT security worldwide. It provides a cyber security architecture that protects against 5th and 6th generation cyber-attacks across various devices and web culture. It is headquartered in Tel Aviv, Israel.
On January 19, CHKP added Quantum Lightspeed Firewalls to its Check Point Quantum portfolio, claiming it to be the biggest network security revolution in the last decade. The company expects these ‘hyper-fast’ firewalls to deliver line-rate firewall performance and set a new standard in cybersecurity performance.
CHKP’s revenues increased 4.9% year-over-year to $534 million, and its net cash provided by operating activities grew 1.3% year-over-year to 250.70 million in the third quarter ended September 30. CHKP’s non- GAAP EPS increased marginally from its year-ago value to $1.65.
The consensus revenue estimate of $2.15 billion for the fiscal period ending December 2021 indicates an increase of 4.3% year-over-year. Its EPS is expected to come in at $6.94 for the same period, indicating a rise of 2.3% year-over-year. The company has an impressive earnings surprise history, as it has surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 4.8% over the past nine months and 9.3% over the past month to close its last trading session at $124.88.
CHKP’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each other weighted to an optimal degree.
CHKP is rated an A in Quality and a B in Value. It is ranked #3 among the 27 stocks in the Software - Security industry. To see additional POWR Ratings for Growth, Sentiment, Momentum, and Stability for CHKP, click here.
NortonLifeLock Inc.(NLOK)
NLOK, formerly known as Symantec Corporation, provides cyber safety solutions for consumers worldwide. NLOK offers the Norton 360, an integrated platform for cyber safety coverage. The company helps customers protect their devices, online privacy, identity, and home networks from cybercrime.
In November 2021, the company announced that the U.S. Department of Justice has cleared its merger with Avast and is expected to be completed in mid-2022. The merger with a significant player like Avast should boost its capabilities and help strengthen its position in the cybersecurity space.
NLOK’s net revenues increased 10.5% year-over-year to $692 million in the second quarter ended October 1. Its Non-GAAP operating income grew 15.6% from the year-ago value to $363 million, while its non-GAAP net income improved 18.6% year-over-year to $255 million. Its non-GAAP EPS increased 19.4% from its year-ago value to $0.43.
Analysts expect the company’s revenue to grow 9.8% year-over-year to $701.42 million in the fiscal third quarter ended December 2021. NLOK’s EPS is expected to come in at $0.44 for the same quarter, indicating a rise of 14.7% year-over-year. Moreover, NLOK has topped the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 26.9% to close yesterday’s trading session at $26.36. NLOK has gained 22.7% over the past nine months.
NLOK’s POWR Ratings reflect its solid fundamentals. The company has an overall rating of B, which translates to Buy in our proprietary rating system.
NLOK is rated an A in Quality and a B in Value. Within the Software-Security industry, it is ranked #5. Click here to see the NLOK’s growth, Momentum, Stability, and sentiment ratings.
Qualys, Inc. (QLYS)
QLYS operates as a leading provider of cloud-based IT, security, and compliance solutions worldwide. It offers a range of solutions for financial services, insurance, healthcare enterprises, and government entities. The company has over 19000 global customers and active users in more than 130 countries.
In December 2021, announced 30 days free access to its Web Application Scanning (WAS) solution to help companies protect against Log4Shell, which is called “one of the most serious flaws they’ve seen,” by the U. S. government officials. The free access could propel continued demand for the solution, benefitting the company.
In November 2021, QLYS announced that they achieved the AWS Graviton Ready designation, part of the Amazon Web Services, Inc. (AWS) Service Ready Program, which recognizes the integration of the Qualys Cloud Agent with AWS Graviton Service. QLYS customers can now “achieve their security and compliance goals while benefitting from the cost efficiency and performance of modern infrastructure like AWS Graviton,” said Sumedh Thakar, president and CEO of Qualys.
QLYS’s revenues increased 12.7% year-over-year to $104.93 million in the third quarter ended September 30. Its income from operations grew 21.6% from the year-ago value to $31.98 million, while its non-GAAP net income improved 8.8% year-over-year to $34.15 million. Its non-GAAP EPS increased 11.7% from its year-ago value to $0.86.
The consensus revenue estimate of $108.44 million for the fourth fiscal year ending December 2021 indicates an increase of 14.4% from the prior-year quarter. Analysts expect QLYS’s EPS to grow 12.1% year-over-year to $0.80 for the same quarter. The company has also topped Street EPS estimates in each of the trailing four quarters.
QLYS shares have gained 25.7% over the past six months to close the last trading session at $124.96. The stock has gained 8.7% over the past three months.
It’s no surprise that QLYS has an overall rating of B, which translates to Buy in our proprietary POWR Ratings system. The stock is rated an A in Quality. It is ranked #6 in the same industry.
In addition to the POWR Ratings grades highlighted, you can see the QLYS’s Growth, Value, Momentum, Stability, and Sentiment ratings here.
CHKP shares were trading at $126.55 per share on Thursday afternoon, up $1.67 (+1.34%). Year-to-date, CHKP has gained 8.57%, versus a -4.47% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
3 Cybersecurity Stocks That Deserve a Place in Your Portfolio StockNews.com
