Though the broad tech sector finished in the green during Monday trading, there were certainly some pockets of weakness. Tech companies operating within the cyber sector are taking exceptionally large falls today, which are mainly attributed to the recent downgrade JP Morgan gave to Cyberark Software (NASDAQ:CYBR). We will review CyberArk as well as other cyber companies that have been hit by this ripple effect, as this potentially provides a buying opportunity for these favorably ranked stocks.
It is also worth noting that cyber stocks are being brought down by investors reaping profits now. As they drag prices down, here are some stocks to be mindful of which could be interesting longer-term investments for those seeking to get in on the space following this slump:
CyberArk (CYBR)
JP Morgan downgraded CYBR to an “underperform” rating. Upon this news, investors have been scrambling to dump the stock to avoid taking a hefty loss. The stock was down about 17% today. This sudden dip is coming after CyberArk has nearly doubled in an 11 day span from February 9-20, surging up 95% in that time. Now here we are, speculating whether this is a buying opportunity or if this stock has room to wiggle lower. Here’s what you should know:
CYBR is currently a Zacks Rank #2 (Buy). The IT industry is a good place for CyberArk to be operating within, as IT services ranks among the top 20% of industries. The EPS consensus has shot up from 30 days ago to now. A month ago, our EPS consensus was -$0.26, and since has become a current EPS consensus of $0.03.
The company hasn’t even been trading publicly for half a year yet, but it has performed extremely well in its short lifetime. Its Q3 earnings beat our consensus by a whopping 1600%. CYBR has built momentum since then, recently reporting a beat on our consensus for Q4 earnings by 1800%. Indeed, the growth rate on CyberArk is too big to ignore.
Palo Alto Networks (NYSE:PANW)
Palo Alto has been rallying in the past few weeks. However, after JP Morgan’s downgrade on CYBR, Palo Alto has been touched by the ripple effect of the downgrade. The stock is down 2.6% thus far in trading today. PANW engages in providing firms an integrated network security platform, allowing for more control and peace of mind with the software it provides.
PANW is a Zacks Rank #2 (Buy). The growth rate for this fiscal year is 36.6%, while the industry’s as a whole is only 8.2%, suggesting this is another solid growth stock.
Vasco Data Security International (NASDAQ:VDSI)
Vasco Data Security designs, markets, develops, and supports security products and services. These products and services secure and oversee access to computer systems of government and corporate clients. The stock has taken an especially big hit today, down about 5% in Monday trading. This presents a buying opportunity for investors that have been eyeing VDSI, waiting for the right chance to pounce on a discount.
VDSI has a Zacks Rank #1. Expect more volatility with this stock, as it has a beta of 2.07. Our consensus estimate calls for an EPS of $0.16. However, VDSI is geared to beat earnings this quarter, as it has in each of the last 4 quarters. As a matter of fact, VDSI has posted a beat on our consensus each quarter by an average of 428.89%. You may not want to sleep on this current discount too long, because the Vasco Data Security posts its next earnings on 4/23/15.