Technology was a big 2020 winner, and it has started 2021 out the same way. Many of the top software stocks have had an outstanding year. One thing that continues to be critical for companies and governments is protecting data and keeping malicious hackers and malware from invading information technology systems and infrastructure.
In a new research report, Jefferies remains very positive on the top cybersecurity stocks, and with good reason. The rate of serious security problems has increased, and top management at major U.S. companies will not remain for long if the ultimate effort for security and safety isn’t undertaken. The Jefferies report noted this:
We pointed out that the recent cyber breaches have been a significant catalyst for the security space, as our checks indicated that cyber remains a top priority for all businesses and continues to rise as a percentage of IT spending. A consistent theme was a layered approach, as customers use products in tandem, with multiple body guards in each security category whether it be endpoint, email security, vulnerability management etc. This defense strategy should keep multiple vendors doing well for the foreseeable future. We noted that 4 of our 6 cyber names have outperformed the I shares expanded Tech-Software ETF since the third quarter, raising the bar for expectations. That said, fundamentals remain favorable and we recommend a basket of Security names.
Five stocks are recommended, all rated Buy and all outstanding ideas for aggressive growth investors looking to add this hot technology silo. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Shares of this cybersecurity giant have pulled back some recently after a stellar run and are offering an outstanding entry point. CrowdStrike Holdings Inc. (NASDAQ: CRWD) is a leader in the endpoint protection platform (EPP) market. EPP solutions help protect enterprises’ internet-connected devices from cyberattacks, and there is a market shift from signature-based on-premises solutions to cloud-based platforms that use machine learning.
CrowdStrike’s platform is one of the few 100% cloud-based architectures and is uniquely positioned to displace incumbents with its platform breadth, including advanced detection and remediation capabilities.
Many analysts feel that the company is well positioned for sustainable success in a market in which the share leaders have failed to innovate. Outside of core endpoint security, most expect CrowdStrike can continue to drive strong multi-module adoption, leading to increased stickiness and better long-term positioning.
Jefferies has a $275 price target on the shares, well above the Wall Street consensus target of $220.15. CrowdStrike stock closed at $222.36 on Monday.