According to a McKinsey report, annual cybersecurity attack damages by 2025 could reach $10.5 trillion. This has made cybersecurity one of the fastest-growing sectors, as it is crucial in everyday life. So, today, let’s look at three cybersecurity stocks leading the way. To get the list, I looked for companies with:
- Minimum 10% growth in full-year YOY EPS growth,
- A minimum buy rating from analysts, and a
- Positive YTD price return.
Then, I sorted the list based on their full-year YOY earnings growth to ensure that I only focused on the companies that analysts love and the market buys and grows its earnings.
Palo Alto Networks (PANW)
Considered the leader in enterprise cyber security, Palo Alto Networks (NASDAQ:PANW) is a global powerhouse that helps companies secure their network using artificial intelligence and automotive solutions.
The company provides its customers with a complete zero-trust solution that includes analytics, attack surface management, automation, and endpoint security solutions. It also has a joint venture with IBM to offer AI-powered security offerings.
Palo Alto’s FY’23 numbers showed significant growth, with revenue increasing 25% year over year and reaching $6.9 billion. Basic EPS also saw a significant turnaround, from a loss of 90 cents to a $1.45 per share profit, representing a 261% growth.
PANW stock is trading 2% higher YTD. Meanwhile, analysts rate it a strong buy, signifying its potential for further price growth.
Crowdstrike Holdings (CRWD)
A leader in endpoint protection solutions, CrowdStrike Holdings (NASDAQ:CRWD) specializes in cybersecurity software-as-a-service (SaaS) platform that delivers cloud-delivered protection of endpoints, identity, cloud workloads and data.
Its Falcon platform delivers performance-driven protection using a lightweight agent architecture with cloud module integration of up to approximately 22 types. The company is expanding its partnership with Google Cloud to build cloud-native cybersecurity to secure cloud intrusions.
CrowdStrike reported a strong end to FY’24. Total and subscription revenue grew 36%, while ARR increased 34% YOY. GAAP net income also improved significantly, reaching $89.3 million from a loss of $183.2 million the previous year.
As a result, the company made a turnaround profit of $0.37 per share for the year. This is a strong comeback from the previous year’s loss of $0.79 per share, representing a 147% improvement.
CRWD stock is up 27.05% YTD and has a strong buy rating from 44 analysts. With a partnership with tech giant Alphabet and its Google Cloud and a turnaround performance for FY’23, it’s a no-brainer that it’s one of my top up-and-coming stocks to watch.
AvePoint (AVPT)
The leader in enterprise-class cloud compliance solutions, AvePoint (NASDAQ:AVPT) is an IT and consulting firm that offers digital security, data handling and information technology operations under its cloud-native software platform.
The company’s platform offers a combination of modularity in its cloud service architecture that seeks to resolve organizational operational challenges. AvePoint recently announced the addition of three new products to FedRAMP (moderate) authorization. These include AvePoint tyGraph, MaivenPoint Examena, and MaivenPoint Curricula, enabling organizations to remove the barriers to workplace innovation.
Looking closer at its FY’23 report, AvePoint reported a 17% revenue growth year over year. This was primarily driven by its software-as-a-service (SaaS) segment, which reported an impressive 37% revenue increase. While the company is still operating at a loss, things are improving. 2023 ended with a $0.12 loss per share compared to last year’s $0.22 loss.
AVPT stock is up 14.18% YTD and has a strong buy rating from analysts. This combination of earnings recovery, strong brand recognition and analyst ratings shows that AVPT is one of the best up-and-coming stocks in the market.
On the date of publication, Rick Orford 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.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.