As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the cybersecurity industry, including SentinelOne (NYNYSE:SE:S) and its peers.
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 slower Q1; on average, revenues beat analyst consensus estimates by 1.4%. while next quarter's revenue guidance was 0.5% below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but cybersecurity stocks have shown resilience, with share prices up 5.1% on average since the previous earnings results.
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 $186.4 million, up 39.7% year on year, topping analysts' expectations by 2.9%. It was a weak quarter for the company, with a miss of analysts' billings estimates and underwhelming revenue guidance for the next quarter.
“We delivered an extraordinary 40% revenue growth and our first ever quarter of positive free cash flow, a significant milestone in our growth journey,” said Tomer Weingarten, CEO of SentinelOne.
SentinelOne achieved the fastest revenue growth of the whole group. The company added 60 enterprise customers paying more than $100,000 annually to reach a total of 1,193. The stock is up 8.3% since the results and currently trades at $21.05.
Is now the time to buy SentinelOne? Find out by reading the original article on StockStory, it's free. Best Q1: Zscaler (NASDAQ:ZS)After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Zscaler reported revenues of $553.2 million, up 32.1% year on year, outperforming analysts' expectations by 3.2%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.
Zscaler scored the biggest analyst estimates beat among its peers. The stock is up 23.6% since the results and currently trades at $192.22.
Weakest Q1: Rapid7 (NASDAQ:RPD)Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.
Rapid7 reported revenues of $205.1 million, up 12% year on year, in line with analysts' expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.
Rapid7 had the weakest full-year guidance update in the group. The company lost -64 customers and ended up with a total of 11,462. The stock is down 5.6% since the results and currently trades at $43.23.
Tenable (NASDAQ:TENB)Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.
Tenable reported revenues of $216 million, up 14.4% year on year, surpassing analysts' expectations by 1.2%. It was a slower quarter for the company, with a miss of analysts' billings estimates.
The stock is down 3.2% since the results and currently trades at $43.58.
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 $617 million, up 19.1% year on year, surpassing analysts' expectations by 2.1%. It was a solid quarter for the company, with optimistic revenue guidance for the next quarter and a decent beat of analysts' ARR (annual recurring revenue) estimates.
Okta achieved the highest full-year guidance raise among its peers. The stock is down 3.2% since the results and currently trades at $93.25.
