The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Qualys (NASDAQ:QLYS) and the rest of the cybersecurity stocks fared in Q3.
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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.5% above.
While some cybersecurity stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1% since the latest earnings results.
Qualys (NASDAQ:QLYS)
Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ:QLYS) provides organizations with software to assess their exposure to cyber-attacks.
Qualys reported revenues of $153.9 million, up 8.4% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
"Q3 was another strong quarter of rapid innovation for Qualys, reflecting our ongoing commitment to technology leadership, cybersecurity transformation, and successful outcomes for customers," said Sumedh Thakar, Qualys' president and CEO.
Interestingly, the stock is up 19.6% since reporting and currently trades at $153.78.
Is now the time to buy Qualys? Access our full analysis of the earnings results here, it’s free.
Best Q3: Okta (NASDAQ:OKTA)
Founded during the aftermath of the financial crisis in 2009, Okta (NASDAQ:OKTA) is a cloud-based software-as-a-service platform that helps companies manage identity for their employees and customers.
Okta reported revenues of $665 million, up 13.9% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 4.1% since reporting. It currently trades at $85.10.
Is now the time to buy Okta? Access our full analysis of the earnings results here, it’s free.
Weakest 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 $210.6 million, up 28.3% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
SentinelOne delivered the weakest performance against analyst estimates in the group. The company added 77 enterprise customers paying more than $100,000 annually to reach a total of 1,310. As expected, the stock is down 17.7% since the results and currently trades at $23.63.
Read our full analysis of SentinelOne’s results here.
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 $1.01 billion, up 28.5% year on year. This result beat analysts’ expectations by 2.8%. It was a strong quarter as it also logged an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
CrowdStrike scored the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $361.76.
Read our full, actionable report on CrowdStrike here, it’s free.
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 $2.14 billion, up 13.9% year on year. This print beat analysts’ expectations by 0.8%. Aside from that, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
Palo Alto Networks had the weakest full-year guidance update among its peers. The stock is up 1.5% since reporting and currently trades at $398.38.
Read our full, actionable report on Palo Alto Networks here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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