Introduction:
Cybersecurity is one of the hottest sectors in the tech industry, as the demand for protecting data, devices, and networks from cyberattacks is soaring. According to IDC, global spending on cybersecurity is expected to exceed $200 billion in 2023, up about 12% from 2022. Cybersecurity stocks are a great way to capitalize on this trend and potentially generate massive returns in the long run. Here are three cybersecurity stocks that could catapult you into the millionaires’ club if you invest wisely.
1.CrowdStrike Holdings (NASDAQ: CRWD):
CrowdStrike is one of the leading providers of cloud-based endpoint security software, which protects devices such as laptops, smartphones, and servers from malicious threats. The company uses artificial intelligence and machine learning to detect and prevent cyberattacks in real time. CrowdStrike has over 13,000 customers across 120 countries, including some of the largest enterprises and government agencies in the world.
CrowdStrike has been growing rapidly, as its revenue increased by 82% year-over-year to $1.1 billion in fiscal 2021, which ended on January 31. The company also achieved positive free cash flow and non-GAAP profitability for the first time in its history. CrowdStrike expects to grow its revenue by another 50% in fiscal 2022, driven by its expanding product portfolio, growing customer base, and high retention rate.
CrowdStrike’s stock has been on a tear, surging by over 200% in the past year. The stock currently trades at a lofty valuation of about 40 times trailing-12-month sales, but that reflects its strong growth potential and competitive advantage in the cybersecurity market. CrowdStrike is a top cybersecurity stock to buy now and hold for the long term.
2. Zscaler (NASDAQ: ZS):
Zscaler is another cloud-based cybersecurity company that provides internet security software for enterprises. Zscaler’s platform enables secure and fast access to applications and data across any device, network, or cloud. Zscaler’s software also helps customers reduce costs, improve performance, and comply with regulations.
Zscaler has over 5,000 customers worldwide, including some of the most prominent names in various industries, such as Siemens, GE, Microsoft, and Uber. Zscaler’s revenue grew by 55% year-over-year to $673 million in fiscal 2020, which ended on July 31. The company also improved its non-GAAP profitability and free cash flow margin significantly. Zscaler expects to grow its revenue by another 45% in fiscal 2021, driven by its strong demand for its cloud security solutions amid the digital transformation and remote work trends.
Zscaler’s stock has also been soaring, gaining over 150% in the past year. The stock currently trades at a premium valuation of about 50 times trailing-12-month sales, but that reflects its impressive growth prospects and leadership position in the cloud security market. Zscaler is another top cybersecurity stock to buy now and hold for the long term.
3. Fortinet (NASDAQ: FTNT):
Fortinet is one of the largest independent cybersecurity companies by total annual sales. Fortinet provides a broad range of security products and services for enterprises, service providers, and government organizations. Fortinet’s flagship product is its FortiGate firewall, which is a hardware device that secures data centers and networks from cyberattacks. Fortinet also offers software solutions such as endpoint protection, cloud security, threat intelligence, and network access control.
Fortinet has over 510,000 customers across more than 100 countries, including some of the most respected brands and institutions in the world, such as AT&T, IBM, NASA, and Starbucks. Fortinet’s revenue grew by 20% year-over-year to $2.6 billion in fiscal 2020, which ended on December 31. The company also delivered strong non-GAAP profitability and free cash flow generation. Fortinet expects to grow its revenue by another 18% in fiscal 2021, driven by its diversified product portfolio, loyal customer base, and innovation capabilities.
Fortinet’s stock has also been performing well, rising by over 80% in the past year. The stock currently trades at a reasonable valuation of about 14 times trailing-12-month sales, which is lower than many of its peers in the cybersecurity space. Fortinet is a solid cybersecurity stock to buy now and hold for the long term.
Experts' Opinion:
Cybersecurity experts agree that these three stocks are among the best bets in the industry right now. Here are some of their opinions:
- Daniel Ives, an analyst at Wedbush Securities, has an outperform rating and a $300 price target on CrowdStrike’s stock. He believes that CrowdStrike is “the best pure play in cloud security” and that it has a “massive runway of growth” ahead.
- Brent Bracelin, an analyst at Piper Sandler, has an overweight rating and a $300 price target on Zscaler’s stock. He thinks that Zscaler is “the clear leader in cloud security” and that it has a “unique opportunity to disrupt legacy network security vendors”.
- Keith Weiss, an analyst at Morgan Stanley, has an overweight rating and a $250 price target on Fortinet’s stock. He says that Fortinet is “one of the most consistent performers in security” and that it has a “strong competitive position and attractive valuation”.
Conclusion:
Cybersecurity is a booming sector that offers tremendous opportunities for investors who are looking for high-growth and high-return stocks. CrowdStrike, Zscaler, and Fortinet are three of the best cybersecurity stocks to buy now, as they have strong competitive advantages, loyal customers, and impressive growth prospects in the cybersecurity market. These stocks could catapult you into the millionaires’ club if you invest wisely and hold them for the long term.
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