Apps & Software
6 Leading Cybersecurity Software Stocks Set to Explode Higher in 2023
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After a horrific 2022 in which the tech-heavy Nasdaq plunged a stunning 33%, many investors decided it was high time to dump tech stocks, and dump them they did. Legacy technology giants like Alphabet (Google’s parent), Amazon.com, Meta Platforms (the Facebook and Instagram parent) were crushed to lows not seen in years. While some have bounced back, many remain as much as 50% or more below their 52-week highs. These companies have been forced to lay off thousands of workers in an attempt to lower costs and improve earnings, and prospects going forward are tepid in the near term.
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One tech silo that is poised to continue to explode higher is cybersecurity. Every year, hackers and cybercriminals get more sophisticated and force corporations and government agencies to make sure they have the best possible security for their data. The leading companies that dominate cybersecurity software remain among the best tech ideas now. We screened our 24/7 Wall St. cybersecurity stock universe looking for those with Buy ratings and strong positions in the industry. The following six top stocks continue to stand out and look to remain on top in a field that is constantly evolving.
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 pulled back in a big way in 2022, after a huge run, and are offering an outstanding entry point. CrowdStrike Holdings Inc. (NASDAQ: CRWD) provides cloud-delivered protection across endpoints and cloud workloads, identity and data. The company offers threat intelligence, managed security services, IT operations management, threat hunting, Zero Trust identity protection and log management.
CrowdStrike primarily sells subscriptions to its Falcon platform and cloud modules through its direct sales team that leverages its network of channel partners.
With its stock down a stunning 50% from highs printed early last year, this preeminent company offers investors one of the best ways to participate in the huge growth proposition cybersecurity offers.
Truist Financial has a $175 price target on Crowdstrike stock. The consensus target is $167.02, and Monday’s $120.65 per share close was up almost 3% on the day.
This company has less than a $6 billion market cap, which may make it a prime takeover target. CyberArk Software Ltd. (NASDAQ: CYBR) develops, markets and sells software-based security solutions and services in the United States, Europe, the Middle East and elsewhere.
The company’s solutions include the following:
Furthermore, CyberArk’s robust Identity and Access Management as a Services offers adaptive multi-factor authentication (MFA), single sign-on, secure Web sessions, application gateway, identity lifecycle management and directory services, as well as customer identity services providing authentication and authorization services, MFA, directory and user management to enable organizations to provide their customers with easy and secure access to websites and applications.
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Additional offerings include Secrets Manager Credential Providers, to provide and manage the credentials used by third-party solutions, and Secrets Manager Conjur for cloud-native applications.
D.A. Davidson’s $185 target price is higher than the consensus target of $176.44. CyberArk Software stock ended Monday’s session trading at $145.50.
This stock has done well but still offers a reasonably attractive entry point. Fortinet Inc. (NASDAQ: FTNT) provides broad, integrated and automated cybersecurity solutions in the Americas, Europe and elsewhere.
The company’s products and services include the following:
The company provides security subscription, technical support, professional and training services.
Loop Capital has set its target price at $80, though Fortinet stock has a consensus target of just $69.34. Monday’s closing share price was $59.62.
This Wall Street favorite may have the biggest potential upside in the group. Okta Inc. (NASDAQ: OKTA) provides identity solutions for enterprises, small and medium-sized businesses, universities, nonprofits and government agencies in the United States and internationally.
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The company offers Okta Identity Cloud, a platform that offers a suite of products and services, such as the following:
Okta also provides Auth0 products, including the following:
The company offers customer support, training, and professional services. It sells its products directly to customers through sales force and channel partners.
Okta stock has a $90 target price at Needham. The $81.10 consensus is somewhat closer to Monday’s closing print of $71.64.
This company continues to be one of the most dominant players in the industry, and it recently crushed earnings expectations. Palo Alto Networks Inc. (NASDAQ: PANW) provides cybersecurity solutions worldwide.
The company offers firewall appliances and software. Panorama is a security management solution for the control of firewall appliances and software deployed on a customer’s network, as well as their instances in public or private cloud environments, as a virtual or a physical appliance. Virtual system upgrades are available as extensions to the virtual system capacity that ships with physical appliances.
Palo Alto Networks also provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection and firewall, as well as DNS security, Internet of Things security, SaaS security API and SaaS security inline, and threat intelligence and data loss prevention.
In addition, the company offers cloud security, secure access, security operations and threat intelligence and cybersecurity consulting. Its professional services include architecture design and planning, implementation, configuration and firewall migration. Education services include certifications and online and in-classroom training. It also offers support services.
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Palo Alto Networks sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers and government entities operating in various industries, including education, energy, financial services, government entities, health care, internet and media, manufacturing, public sector and telecommunications.
The $235 Credit Suisse target price compares with a $224.74 consensus target for Palo Alto Networks stock. The shares closed on Monday at $188.51.
This remains one of the hottest cybersecurity stocks and is a top pick across Wall Street. Zscaler Inc. (NASDAQ: ZS) operates as a cloud security company worldwide. Its offerings include the following:
The company’s platform modules include Zscaler Central Authority, Zscaler Enforcement Node and Zscaler Log Servers.
Zscaler serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, health care, manufacturing, media and communications, public sector and education, technology and telecommunications services industries.
Needham’s Strong Buy rating comes with a $210 target price. The consensus target is $170.77, and Zscaler stock closed at $131.84 on Monday.
Clearly, the need for cybersecurity is increasing every year. These top stocks offer investors solid ways to play the segment in a variety of areas. Most importantly, they are trading at levels that offer solid entry points and they have enormous upside potential.
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