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 Q1.
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 satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 3.7% on average 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 $159.9 million, up 9.7% year on year. This print exceeded analysts’ expectations by 1.8%. 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.
"Our Q1 results reflect the success of new product initiatives and demonstrate customer demand for natively-integrated cybersecurity risk management solutions," said Sumedh Thakar, Qualys' president and CEO.
Interestingly, the stock is up 16.7% since reporting and currently trades at $147.78.
Is now the time to buy Qualys? Access our full analysis of the earnings results here, 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 $678 million, up 22.6% year on year, outperforming analysts’ expectations by 1.6%. The business had a very strong quarter with full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ annual recurring revenue estimates.
Zscaler pulled off the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 24.7% since reporting. It currently trades at $312.81.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $229 million, up 22.9% 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 miss of analysts’ billings estimates.
As expected, the stock is down 5.7% since the results and currently trades at $18.55.
Read our full analysis of SentinelOne’s results here.
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 $239.1 million, up 10.7% year on year. This number beat analysts’ expectations by 2.4%. Taking a step back, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ annual recurring revenue estimates.
Tenable delivered the biggest analyst estimates beat among its peers. The stock is up 4.1% since reporting and currently trades at $35.05.
Read our full, actionable report on Tenable here, it’s free.
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 $688 million, up 11.5% year on year. This print surpassed analysts’ expectations by 1.2%. More broadly, it was a satisfactory quarter as it also produced EPS guidance for next quarter exceeding analysts’ expectations but a miss of analysts’ billings estimates.
The stock is down 22.4% since reporting and currently trades at $97.50.
Read our full, actionable report on Okta here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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