3 AI-Centric Cybersecurity Stocks Set to Deliver Massive Sales Growth
Investing.com | Feb 28, 2024 10:03
- Wall Street’s Q4 earnings season continues to wind down, with the last batch of notable cybersecurity stocks set to report their results.
- There are several companies poised to trounce expectations thanks to their innovations in artificial intelligence.
- As such, here are three high-growth AI-centric security software stocks worth buying ahead of their respective earnings.
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- Earnings Date: Tuesday, March 5
- Year-To-Date Performance: +25.8%
- Market Cap: $77.1 Billion
- Earnings Date: Thursday, March 7
- Year-To-Date Performance: +10.1%
- Market Cap: $32.5 Billion
- Earnings Date: Wednesday, March 13
- Year-To-Date Performance: +3.9%
- Market Cap: $8.5 Billion
Wall Street’s fourth-quarter earnings season may be drawing to a close, but there are still several notable companies set to report their latest financial results in the coming weeks.
While most of the focus has been on the ‘Magnificent 7’ mega-cap group of tech stocks, several high-flying security software companies are due to deliver their Q4 updates.
In the following article, I'll dive into three high-growth security software stocks worth owning ahead of their quarterly reports as growth prospects in artificial intelligence (AI) and machine learning (ML) remain strong.
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h2 1. CrowdStrike/h2CrowdStrike (NASDAQ:CRWD) is anticipated to deliver explosive profit and revenue growth when it reports its financial results for the fourth quarter on Tuesday, March 5, as it continues to benefit from favorable cybersecurity demand trends.
The company - which provides cloud workload and endpoint security, advanced threat intelligence, and sophisticated cyberattack response services - has been one of the main beneficiaries of the surge in cyber spending from corporations and governments around the world as they respond to growing digital security threats.
As could be expected, an InvestingPro survey of analyst earnings revisions points to surging optimism ahead of the print: 36 out of 37 analysts covering CrowdStrike upwardly revised their profit estimates in the last 90 days as the Street grows increasingly bullish on the security software company.
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Source: InvestingPro
Consensus calls for earnings of $0.82 per share, improving 75% from EPS of $0.47 in the year-ago period. Revenue is forecast to increase 31.7% to a record $839.6 million thanks to growing demand for its innovative ‘Falcon’ cloud-based cybersecurity platform, which is used to detect and prevent security breaches.
It should be noted that the Austin, Texas-based information security specialist has a long history of beating Wall Street’s quarterly estimates, doing so in every quarter since it went public in June 2019.
Source: Investing.com
CRWD stock ended Tuesday’s session at $321.21, a tad below its all-time high of $338.45 reached on February 15. With a market cap of $77 billion, CrowdStrike is one of the leading names in the cloud-based cybersecurity industry.
Wall Street remains optimistic on CRWD, as per an Investing.com survey, which revealed that 45 analysts have a ‘Buy’-equivalent rating on the stock vs. four ‘Hold’-equivalent ratings and only one ‘Sell’-equivalent rating.
h2 2. MongoDB/h2MongoDB (NASDAQ:MDB), a leading provider of modern, cloud-native databases, has emerged as a key player in the rapidly evolving database market and should continue appreciating as it grows earnings, making the stock a buy ahead of its fourth-quarter update.
The cloud database-as-a-service (DBaaS) company’s Q4 print is slated to come out on Thursday, March 7, and it is expected to once again shatter expectations as it benefits from strong demand for its open-source database offering.
Analysts have become increasingly bullish on MongoDB in recent weeks, according to an InvestingPro survey: all 19 of the analysts surveyed in the last three months upwardly revised their earnings forecast to reflect a whopping gain of 101% from their initial estimates.
Source: InvestingPro
The database software specialist is seen earning $0.48 a share in the fourth quarter, compared to a profit of $0.57 per share in the year-ago period.
Revenue is forecast to rise 20.5% year-over-year to $435.6 million, powered by strong enterprise demand for its ‘Atlas’ open-source database software platform.
Notably, MongoDB has beaten Wall Street’s expectations for both the top and bottom line in every quarter since going public in late 2017, as organizations increasingly embrace cloud-native architectures and digital transformation initiatives.
MDB stock ended at $449.95 last night, not far from a recent 52-week peak of about $510 touched on February 12. At its current valuation, New York-based MongoDB has a market cap of $32.5 billion.
It should be mentioned that Wall Street has a long-term bullish view on MongoDB, with 33 out of the 34 analysts surveyed by Investing.com rating it as either a ‘Buy’ or a ‘Hold’.
h2 3. SentinelOne/h2SentinelOne (NYSE:S), a rising star in the booming cybersecurity space, has garnered attention for its innovative AI-powered endpoint protection platform designed to deliver real-time advanced threat prevention, detection, and response capabilities.
Against that backdrop, the Mountain View, California-based cybersecurity firm is forecast to release its fourth quarter financial results on Wednesday, March 13 and sell-side confidence is brimming as organizations spend heavily to confront evolving cyber threats.
In a sign of increasing optimism, EPS estimates have seen 22 upward revisions in the past 90 days, compared to just two downward revisions, as the security software provider continues to make progress towards profitability.
Source: InvestingPro
Consensus estimates call for SentinelOne to report a loss of -$0.04 per share for the fourth quarter, narrowing significantly from a loss per share of -$0.13 in the year-ago period.
Meanwhile, revenue is expected to jump 34.3% to $169.4 million, as it benefits from increased cybersecurity spending amid the complex geopolitical environment.
With the cybersecurity landscape evolving rapidly, SentinelOne is well-positioned to capitalize on the growing demand for next-generation cybersecurity solutions, which should propel significant revenue growth in 2024 and beyond.
S stock - which climbed to a fresh 52-week high of $30.76 on February 14 - closed Tuesday’s session at $28.51. At current levels, the cybersecurity specialist has a market cap of $8.5 billion.
Worth mentioning is that SentinelOne’s stock remains a favorite on Wall Street, with 33 out of 34 analysts surveyed by Investing.com rating shares as either ‘Buy’ or ‘Hold’.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR S&P 500 ETF (SPY (NYSE:SPY)), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Technology Select Sector SPDR ETF (NYSE:XLK).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
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