The biggest names in cybersecurity—firms like CrowdStrike Holdings Inc. (NASDAQ: CRWD)—win a lot of investor interest, but some of the most resilient businesses in the industry may go unnoticed. With the rapid growth of AI and newfound concerns about cybersecurity threats, including via the Iran war and Anthropic's latest model Mythos, there are numerous industry tailwinds to help give these smaller names a boost.
Though cybersecurity is a rapidly growing field, three names in particular may stand out thanks to their unique niches and recent records of financial outperformance. Best of all, each of these firms is trading at a heavy discount compared to Wall Street's consensus price targets, so investors getting in now may still have plenty of room to reap the rewards.
Strong Adoption of Tenable One Platform Can Drive Growth
Tenable Holdings Inc. (NASDAQ: TENB) has a market capitalization under $2 billion, but thanks to its cloud-based Tenable One exposure management platform, the firm is rapidly gaining followers—some 500 enterprise platform customers in the last quarter alone. The result is revenue for the latest quarter up almost 11% year-over-year (YOY), with almost half of new and expansion bookings thanks to Tenable One.
Tenable One is not only increasingly popular but also immensely effective, helping boost average sales price significantly. Recently, a major telecom company signed a seven-figure deal specifically to use Tenable One for monitoring AI-related exposure.
What's best is that a majority of Tenable's customers haven't yet upgraded to Tenable One, so there's plenty of room for internal growth.
On this momentum, full-year 2026 guidance is cheery, calling for Tenable's first-ever annual revenue above $1 billion and climbing operating margins. Despite its Hold rating among analysts remaining cautious while the company continues to prove itself, the consensus price target of nearly $30 is over 70% above current price levels. There seems to be plenty of room for TENB shares to run.
A Stock Price Shock May Present an Opportunity to Buy Qualys
IT security firm Qualys Inc. (NASDAQ: QLYS) may be on the smaller side for the cybersecurity industry at a market cap of under $3 billion, but its reach is impressive: the firm serves more than 10,000 enterprise customers around the world. Most attractive for investors, though, are the firm's margins. Free cash flow margin for 2025, for example, was 43%, and management expects to maintain somewhere in this range for the current year as well.
There's another margin that really stands out here, and that's adjusted EBITDA of 47% for the latest quarter. On top of that, Qualys's revenue topped expectations by climbing by more than 10% YOY, and non-GAAP earnings per share (EPS) also beat analyst predictions.
Now may be a great time to consider QLYS shares, as they fell by about 14% in a week in the midst of the Mythos preview and the shock to the cybersecurity industry more broadly. Investors may still find, though, that this company's fundamentals, cash flow, and lack of reliance on debt help it to stand out.
Despite a Hold rating, QLYS shares could have 80% in upside potential based on analyst estimates.
Commvault's Stock Performance Belies Its Potential, But Takeover Offers May Complicate the Situation
Commvault Systems Inc. (NASDAQ: CVLT) offers data protection and information management software, making it a go-to option for clients looking for ransomware recovery services. Commvault has an excellent revenue growth trajectory: subscription sales climbed by 30% YOY in the last quarter to more than $200 million, while SaaS annual recurring revenue (ARR) climbed by 40% over the same period. Overall, revenue surged by almost 20% YOY, solidly beating estimates.
Management has guided for strong revenue and total ARR growth throughout the fiscal year (which ends in December). Still, CVLT shares have recently traded close to a one-year low amid concerns about volatility in the timing of large transactions leading to the potential for unpredictable sales growth.
Still, these risks seem minimal considering Commvault's recent partnerships, including Microsoft's (NASDAQ: MSFT) own cybersecurity offerings and data infrastructure firm NetApp (NASDAQ: NTAP).
Analysts agree, with three-quarters calling CVLT shares a Buy or equivalent. With a consensus price target above $141 per share, CVLT stock could be in for upside of nearly 50%, helping to recover much of the ground that has been lost in the last year.
Of course, investors should also watch closely for updates about a potential takeover. One reason that Commvault's stock jumped in early April was news that the company had entertained multiple takeover offers.
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The article "3 Under-the-Radar Cybersecurity Stocks With Major Upside Potential" first appeared on MarketBeat.
