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RPD) Vs The Rest Of The Cybersecurity Stocks


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Q3 Earnings Highlights: Rapid7 (NASDAQ:RPD) Vs The Rest Of The Cybersecurity Stocks

Let’s dig into the relative performance of Rapid7 (NASDAQ:RPD) and its peers as we unravel the now-completed Q3 cybersecurity earnings season.

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 mixed Q3; on average, revenues beat analyst consensus estimates by 2% while next quarter’s revenue guidance was in line with consensus. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but cybersecurity stocks held their ground better than others, with the share prices up 25.5% on average since the previous earnings results.

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 $198.8 million, up 13.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.

“Rapid7 ended the third quarter with $777 million in ARR, driven by strong customer traction and momentum around our consolidated offerings for risk and threat management, which contributed over 40% of new business during the quarter,” said Corey Thomas, Chairman and CEO of Rapid7.

Rapid7 Total Revenue

Rapid7 Total Revenue

The stock is up 17.8% since the results and currently trades at $54.08.

Read our full report on Rapid7 here, it’s free.

Best Q3: 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 $164.2 million, up 42.4% year on year, outperforming analyst expectations by 5%. It was a strong quarter for the company, with a significant improvement in its gross margin and a solid beat of analysts’ revenue estimates.

SentinelOne Total Revenue

SentinelOne Total Revenue

SentinelOne scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The company added 66 enterprise customers paying more than $100,000 annually to reach a total of 1,060. The stock is up 21.4% since the results and currently trades at $24.31.

Is now the time to buy SentinelOne? Access our full analysis of the earnings results here, it’s free.

Slowest Q3: Varonis (NASDAQ:VRNS)

Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.

Varonis reported revenues of $122.3 million, down 0.8% year on year, falling short of analyst expectations by 2.5%. It was a weak quarter for the company, with a miss of analysts’ revenue estimates and full-year revenue guidance missing analysts’ expectations.

Varonis had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is up 48.4% since the results and currently trades at $46.69.

Read our full analysis of Varonis’s results here.

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 $142 million, up 13.1% year on year, in line with analyst expectations. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter.

The stock is up 25.5% since the results and currently trades at $191.85.

Read our full, actionable report on Qualys 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 $584 million, up 21.4% year on year, surpassing analyst expectations by 4.2%. It was a solid quarter for the company, with a meaningful improvement in its gross margin and a decent beat of analysts’ revenue estimates.

The stock is up 15.3% since the results and currently trades at $83.72.

Read our full, actionable report on Okta here, it’s free.

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The author has no position in any of the stocks mentioned



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