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Q4 Rundown: Zscaler (NASDAQ:ZS) Vs Other Cybersecurity Stocks

StockStory - Wed Apr 10, 7:40AM CDT

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As the Q4 earnings season wraps, let's dig into this quarter's best and worst performers in the cybersecurity industry, including Zscaler (NASDAQ:ZS) 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 Q4; on average, revenues beat analyst consensus estimates by 1.9%. while next quarter's revenue guidance was in line with consensus. Inflation progressed towards the Fed's 2% goal into the end of 2023, leading to strong stock performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and cybersecurity stocks have had a rough stretch, with share prices down 8% on average since the previous earnings results.

Zscaler (NASDAQ:ZS)

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 $525 million, up 35.4% year on year, topping analyst expectations by 3.6%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates.

"We delivered strong Q2 results, with billings, revenue and operating profit all coming in above our guidance as customer interest in the Zscaler Zero Trust Exchange platform remains high," said Jay Chaudhry, Chairman and CEO of Zscaler.

Zscaler Total Revenue

Zscaler pulled off the biggest analyst estimates beat of the whole group. The stock is down 23.5% since the results and currently trades at $184.87.

We think Zscaler is a good business, but is it a buy today? Read our full report here, it's free.

Best Q4: 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 $605 million, up 18.6% year on year, outperforming analyst expectations by 3%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.

Okta Total Revenue

Okta achieved the highest full-year guidance raise among its peers. The stock is up 13.4% since the results and currently trades at $99.06.

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

Weakest Q4: Palo Alto Networks (NASDAQ:PANW)

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 $1.98 billion, up 19.3% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.

Palo Alto Networks had the weakest full-year guidance update in the group. The stock is down 25% since the results and currently trades at $274.79.

Read our full analysis of Palo Alto Networks's results here.

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 $174.2 million, up 38.1% year on year, surpassing analyst expectations by 2.8%. It was a decent quarter for the company, with an impressive beat of analysts' billings estimates but underwhelming revenue guidance for the next year.

SentinelOne pulled off the fastest revenue growth among its peers. The company added 73 enterprise customers paying more than $100,000 annually to reach a total of 1,133. The stock is down 21.8% since the results and currently trades at $21.84.

Read our full, actionable report on SentinelOne here, it's free.

CrowdStrike (NASDAQ:CRWD)

Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.

CrowdStrike reported revenues of $845.3 million, up 32.6% year on year, in line with analyst expectations. It was a solid quarter for the company, with an impressive beat of analysts' billings estimates and a decent beat of analysts' ARR (annual recurring revenue) estimates. While forward guidance for next quarter and the full year were only slightly above expectations, non-GAAP EPS guidance was more convincingly ahead, showing better-than-expected profitability.

The stock is up 2.4% since the results and currently trades at $305.

Read our full, actionable report on CrowdStrike here, it's free.

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