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As cybersecurity stocks’ Q3 earnings season wraps, let's dig into this quarter's best and worst performers, including Okta (NASDAQ:OKTA) and its peers.
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. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but cybersecurity stocks held their ground better than others, with the share prices up 24.2% on average since the previous earnings results.
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, topping 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.
“Our Q3 performance was highlighted by solid top-line growth, record non-GAAP operating profit, and record free cash flow,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta.
The stock is up 15.3% since the results and currently trades at $83.72.
Is now the time to buy Okta? Access our full analysis of the earnings results 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 achieved 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.