3 Cybersecurity Stocks Set to Shine as Remote Work Drives the Necessity of Safety

The Covid-19 pandemic has forced many companies into practising more remote ways to operate over the past 18 months. Firms have had to act quickly to adapt to social distancing rules whilst attempting to remain functional. Today, with businesses aiming to retain their working from home models in the age of the ‘new normal,’ the cybersecurity industry is facing fresh challenges and plenty of opportunities. 

Cybersecurity efforts, such as the protection of digitally stored IP, trade secrets and customer data, has been a weak spot for multiple companies. One notable example of this difficulty that Canadian Nortel Networks found itself in as a result of cyber-attacks aiming to steal trade secrets. 

At Nortel Networks, many passwords belonging to senior executives were stolen and used to obtain confidential information surrounding the company.

Image Source: McKinsey

As we can see from McKinsey & Company’s blueprint for successful cybersecurity firms, industry leaders will need to ramp up their support for distributed companies to deliver remote cybersecurity operating models. 

“According global accountancy group HLB’s 2020 Cyber Security Report, over 50% of organizations experienced security breaches and cyber-attacks in 2020,” said Milad Shojaei, a trainee legal advisor at the Ministry of Justice, and strategy & engagement director at Legal Futures Associate Casedo. “Shockingly, only 42% reported that they were prepared for moving to remote practice, with the majority under threat as a result of Covid.”

With this in mind, there will be heavy levels of focus on emerging cybersecurity firms as more businesses look to ramp up their defenses against attacks. This is likely to result in some exceptional stock movements among public cybersecurity companies. Let’s take a deeper look at some of the stocks that may experience significant growth in this new age of heightened awareness of the importance of online safety: 

CrowdStrike (NASDAQ: CRWD)

Since its flotation in mid-2019, CrowdStrike has experienced significant growth – particularly as businesses rushed to keep protected in the wake of the Covid-19 pandemic. At the time of writing, CrowdStrike shares have climbed 294.79% from the company’s debut, and 540% from 2020’s March 13th stock market crash. 

Today, shares in CRWD are around 10% lower than the stock’s late August peak, and with positive investor sentiment backed by strong fundamentals, the stock could be set for further growth as 2021 progresses. 

In a record-breaking Q2 of 2021 for CrowdStrike, the company’s revenue climbed 70% year-on-year to $1.34 billion. Of this amount, $150.6 million was added to the regular revenue for the quarter, whilst the total revenue also increased by 70% over the year prior – reaching a total of $337.7 billion. 

“Partly, the investment world is increasingly interested in CRWD shares because this growth is not expected to slow down,” notes Maxim Manturov, head of investment research at Freedom Finance Europe. “The company said it expects revenues of between $1.39bn and $1.41bn for the full financial year, which is almost 60% more than the previous year. CrowdStrike uses its cloud-based AI and continuous AI analytics to improve its products and services continuously.”

“The company is a leader in a large and growing market, estimated to increase its total addressable market worth $36.5bn to $43.6bn by 2023; that is, the CAGR will be 9%. CrowdStrike already counts almost half the Fortune 500 companies and 63 Fortune 100 companies as its clients. It should be able to increase its revenues and other relevant financial indicators as a result of its positioning. The average target price is $315 (20% upside potential),” Manturov added. 

Radware Ltd. (NASDAQ: RDWR)

Radware may be a little long in the tooth compared to emerging cybersecurity firms, but the company, which was founded in 1996, has displayed enormous momentum in recent years – and has rallied to new all-time highs in 2021 – soaring past a share price of $30 for the first time since 2000. 

Radware is an American-Israeli cybersecurity and application firm that provides protection for data centers, applications, the public cloud and applications for delivery. 

Significantly, the company has reported net income growth of over 500% year-on-year for Q2 of 2021 – showing that it’s adapted extremely well to the changing demands of customers in the age of the new normal. In fact, Radware has tripled its new customer bookings – showing that there’s plenty of upside to this cybersecurity stalwart. 

Palo Alto Networks (NYSE: PANW)

Palo Alto Networks, an American cybersecurity firm headquartered in California, provides services in network and cloud security as well as endpoint protection.

With over 82,000 enterprise customers across 150 firms, Palo Alto is a stock that’s grown significantly in recent years and now sits at a price 837.29% higher than its New York Stock Exchange debut.

In Q3 2021, Palo Alto reported encouraging earnings in the form of a net income of $139 million – representing an increase on the $114.6 million recorded in the year before.

As many as 64 hedge funds now hold stakes in Palo Alto in Q2 2021, up from 61 in the quarter proper. Viking Global stands as the largest shareholder in the company with shares amounting to $807.8 million. 

The acceleration of digital transformation means that we’re likely to see cybersecurity firms ramp up their products to better support remote work. This welcoming environment for firms may create buying opportunities for stocks – leaving growth potential for investor portfolios.