Q3 Cybersecurity Earnings: Okta (NASDAQ:OKTA) Earns Top Marks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Okta (NASDAQ:OKTA) and the rest of the cybersecurity stocks fared in Q3.
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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.5% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.4% since the latest earnings results.
Best Q3: 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 $665 million, up 13.9% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Okta Total Revenue
Unsurprisingly, the stock is down 3.7% since reporting and currently trades at $78.71.
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Zscaler reported revenues of $628 million, up 26.4% year on year, outperforming analysts’ expectations by 3.7%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Zscaler Total Revenue
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 13.7% since reporting. It currently trades at $180.06.
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 $210.6 million, up 28.3% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
SentinelOne delivered the weakest performance against analyst estimates in the group. The company added 77 enterprise customers paying more than $100,000 annually to reach a total of 1,310. As expected, the stock is down 22.6% since the results and currently trades at $22.20.
Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.
Palo Alto Networks reported revenues of $2.14 billion, up 13.9% year on year. This result surpassed analysts’ expectations by 0.8%. Overall, it was a strong quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Palo Alto Networks had the weakest full-year guidance update among its peers. The stock is down 6.8% since reporting and currently trades at $182.98.
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 $148.1 million, up 21.1% year on year. This print topped analysts’ expectations by 4.7%. It was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Varonis pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 24.7% since reporting and currently trades at $44.24.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
