Wall Street's third-quarter earnings season has largely stalled, but this week's results are due to a variety of cloud computing cybersecurity firms.
Cloud-related software ETFs are trading near their all-time high, with the First Trust Cloud Computing ETF (NASDAQ 🙂 and the Global X Cloud Computing (NASDAQ 🙂 gaining around 48% and 62.8% are up. The high demand for cloud-based offerings during the COVID-19 pandemic continues to benefit these funds. Individual cybersecurity stocks, in particular, benefit from the home environment as companies try to improve their protection.
Below are three cybersecurity names that are likely to show strong profit and revenue growth. Each one is worth considering in the run-up to their upcoming quarterly earnings reports.
1. CrowdStrike: Reports December 2 after markets close
Third Quarter EPS Forecast: + 114.2% YoY
Third quarter revenue forecast: + 70.6% on an annual basis
Cloud-based cybersecurity specialist Crowdstrike (NASDAQ 🙂 – whose technology is used to detect and prevent security breaches – more than doubled its stock during the coronavirus crisis this year.
The stock has risen 196% since the start of the year, past 13% gains in the same time frame, as it has benefited from rising demand from companies to make their IT networks more secure during the transition to work. -from home environment. The cybersecurity leader currently counts nearly half of Fortune 100 companies as customers.
CRWD – which went public last June at $ 34 a share – jumped to a new all-time high of $ 154.92 at the start of the week, ending at $ 147.50 on Tuesday. At current levels, the Sunnyvale, California-based cybersecurity firm has a market cap of approximately $ 21.9 billion.
CrowdStrike, which forecasts easy and revenue in the second quarter, will publish its latest financial results after closing on Wednesday, December 2.
Consensus estimates call for earnings of $ 0.01 per share in the third quarter, compared to a loss of $ 0.07 per share in the same period a year earlier. Revenue is expected to increase 70.6% from the same period last year to a record $ 213.52 million, driven by the rising demand for the cloud-based Falcon cybersecurity platform.
In addition to top-and-bottom-line numbers, investors will watch the growth of CrowdStrike's total subscriber base, which rose 91% in the last quarter to 7,230.
CrowdStrike is trading at nearly 40 times its fiscal year 2021 revenues. Despite high valuation levels, CRWD remains attractive going forward, given the value of its cybersecurity tools in today's environment.
2. Okta: Reports December 2 after markets close
Third Quarter EPS Forecast: + 114.2% YoY
Third quarter revenue forecast: + 32.5% on an annual basis
Okta – widely regarded as the leader in identity and access management – has seen its stock significantly outperform the broader market this year.
The fast-growing cybersecurity company, which helps enterprises securely connect with their employees and customers, has gained 105.4% since the start of the year.
OKTA settled at $ 236.99 yesterday, in sight of its all-time high of $ 251.18 reached on October 14, giving the San Francisco, California-based software-as-a-service company a market capitalization of $ 29.5 billion.
Okta – which, based on its last quarter results and outlook for the end of August – is scheduled to report the following earnings after the closing clock on Wednesday, December 2.
The consensus calls for earnings per share of $ 0.01 for the third quarter, an improvement from a loss of $ 0.07 per share in the same period a year ago. Revenue is expected to increase 32.5% from the same period a year earlier to $ 202.82 million, thanks to the continued expansion of the use of its Okta (NASDAQ 🙂 Identity Cloud platform.
Investors will also focus on Okta & # 39; s subscription software revenues, which were up 44% in the last quarter to $ 190.7 million.
In addition to earnings per share and revenue, market participants will review the company's update on its outlook for the remainder of the year and 2021. $ 800 million to $ 803 million in the last quarter, representing 37% year-over-year growth. Previously, management had expected full year revenues to grow 32% year on year.
After seeing an increase in stock in 2020, Okta should continue to perform well given the high demand for its cybersecurity services.
3. Zscaler: Reports December 2 after markets close
Q1 EPS forecast: + 100% on an annual basis
First quarter revenue forecast: + 41.3% on an annual basis
Zscaler (NASDAQ :), which provides automated threat forensics and dynamic malware protection against advanced cyber threats, has had a remarkable achievement this year.
Shares of the San Jose, California-based cybersecurity specialist have more than doubled this year as the shift to working from home due to the COVID-19 pandemic increased the need for its cloud-based security tools.
ZS, up 226% so far in 2020, closed at $ 151.68 last night, not far from its all-time high of $ 163.80 on Sept. 2. At its current level, the cloud-based information security specialist has a market cap of $ 20.3 billion.
Zscaler, whose revenues and revenues in the last quarter, are expected to publish its fiscal results for the first quarter on Wednesday, December 3, after the market closes.
The consensus calls for earnings per share of $ 0.06, which would indicate 100% growth from earnings per share of $ 0.03 in the same quarter a year ago. Revenue is expected to increase 41.3% from the same period a year earlier to $ 132.24 million, driven by the strong growth of the Zero Trust Exchange platform, which enables organizations to provide secure access to internal applications and services from remote locations.
As such, investors will keep an eye on Zscaler's update with regard to the total number of new customers and the number of business customers. The company announced in its fiscal Q4 earnings report that it had more than 4,500 customers, including more than 150 customers from Fortune 500 companies.
Taking these elements into account, Zscaler appears to be quickly transitioning to one of the leading names in cloud cybersecurity.
