Cybersecurity remains one of the hottest investing ideas in 2024. Cybercrimes continue to rise at an accelerated pace each year, with an estimated 343 million victims in 2023. Moreover, between 2021 and 2021, data breaches shot up by a worrying 72%, comfortably beating previous records. Therefore, betting on the best cybersecurity stocks to buy is as relevant as ever.
Technology is evolving at a rapid pace, and cyber threats are also rising in terms of complexity and frequency. A quick glance at the stellar financials of a few of the leading cybersecurity stocks discussed in the article indicates the sector’s mission-critical nature. Hence, the long-term importance of cybersecurity is growing, positioning cybersecurity stocks for vigorous gains ahead. Here are three with robust financials, attractive shareholder rewards and smashing long-term prospects.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) remains a key player in cyber defense, specializing in the delivery of sophisticated firewall solutions. It has positioned itself as one of the top contenders in the burgeoning secure access service edge (SASE) market, offering an integrated networking and security solution both on-premises and in the cloud.
Unlike its competition, which has struggled to provide a full suite of SASE capabilities, Fortinet shines with a two-pronged approach. First, it utilizes custom silicon development to handle the heavy-duty networking and security functionalities. It then layers its offerings with its all-covering FortiOS operating system, enabling the firm to incorporate all necessary functions into a single FortiGate appliance efficiently.
Furthermore, the company’s recently released financial results beat analyst estimates across both lines, but its stock dipped post-earnings following a soft top-line forecast. Given the tough comps faced by its products division, the market is overreacting. Sales only experienced significant growth due to panic buying during the pandemic.
Zscaler (ZS)
Zscaler (NASDAQ:ZS) leads the way in cloud-based security, offering a robust platform that ensures secure access to cloud resources and a solid security framework relied on by over 7,500 customers. Moreover, the majority of these customers are big players, contributing over $1 million in annualized recurring revenues (ARR).
The company’s financials are nothing short of a visual feast. It has comfortably surpassed analyst estimates across both lines dating back to the third-quarter (Q3) 2019. Moreover, its growth and profitability metrics are a peach, contributing to a 186% five-year gain in ZS stock.
It posted another blow-out result in the second quarter (Q2), with sales of $35.4 billion, a 35.4% bump on a year-over-year (YOY) basis. Additionally, its non-GAAP EPS of 76 cents beat estimates by 18 cents. Also, Zscaler has provided an optimistic outlook for fiscal 2024, projecting sales to reach $2.1 billion, indicating 31% YOY growth.
Darktrace PLC (DRKTF)
Cybersecurity and AI are a killer combo, with AI’s predictive analytics significantly enhancing threat detection and response times. Through AI, cybersecurity defenses can become more dynamic and proactive against sophisticated attacks. Perhaps a company that’s one of the best exponents of AI and cybersecurity is Darktrace PLC (OTCMKTS:DRKTF)
It offers a powerful tool that utilizes AI to gauge an organization’s IT behavior efficiently. Once this data is gathered, the AI can effectively identify network irregularities typical of a cyberattack. Moreover, the company claims the service can interrupt ongoing attacks in seconds.
The firm’s operating results have been excellent, with double-digit YOY growth across key revenue and earnings metrics. Within half a decade, the company’s free cash flow per share turned positive from a negative $4.26 in 2019. Additionally, it amassed a massive annual recurring sales base, with that figure up almost 30% to $545.4 million in fiscal year 2023.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines