Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

3 Top Cybersecurity Stocks For 2021 As The Sector Heats Up

Published 01/06/2021, 05:18 AM
Updated 09/02/2020, 02:05 AM

Cybersecurity software stocks have been flying high in recent months. Both the ETFMG Prime Cyber Security ETF (NYSE:HACK), which rose 38.6% in 2020, and the First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR), which climbed 48.1% last year, are each trading just below their all-time highs.

HACK Daily

The sector is set to enjoy another year of blockbuster gains as the rampant increase in cyber-attacks fuels demand for innovative cybersecurity solutions.

The three stocks below could provide some of the best growth potential in the year ahead and are well worth considering given their emerging dominance in the cybersecurity space.

1. CrowdStrike

Crowdstrike (NASDAQ:CRWD) set the market on fire last year, with shares of the cloud-based cybersecurity specialist surging an astonishing 325% in 2020.

The Sunnyvale, California-based company—whose technology is used to detect and prevent security breaches—has benefitted from the growing demand from businesses to make their IT networks more secure in the work-from-home environment during the coronavirus pandemic.

CRWD stock, which touched an all-time high of $227.36 on Dec. 23, closed at $211.24 last night, valuing the cybersecurity company at roughly $46.4 billion.

CRWD Daily

Despite stretched valuations—CrowdStrike trades at a sky-high price-to-sales (P/S) ratio of almost 61—the stock still looks attractive going forward, considering the strong demand it has seen for its cloud-based cyber security tools.

The fast-growing tech company, which counts nearly half of the Fortune 100 companies as customers, said it had a total of 8,416 customers as of the end of its most recent quarter, up 85% year-over-year.

The cybersecurity leader is expected to see even greater demand in the year ahead as it looks to be one of the main beneficiaries of the increased cybersecurity spending from corporations amid the fallout of the massive hack that originated at network management software provider SolarWinds late last year.

2. Okta

Okta (NASDAQ:OKTA), which helps businesses manage and secure user authentication, has been one of the fastest-growing companies in the booming cloud-based software-as-a-service (SaaS) sector.

The San Francisco, California-based company—widely considered the leader in the identity and access management space—saw its stock surge nearly 123% in 2020 thanks to robust demand for its cybersecurity platform amid the shift to remote work during the ongoing health crisis.

OKTA settled at $249.55 yesterday, within sight of its record high of $286.79 touched on Dec. 23, giving the cybersecurity firm a market cap of $33.1 billion.

OKTA Daily

The identity-and-access management specialist is well-positioned to continue its march higher in 2021 as the anticipated jump in cybersecurity spending will likely lead to greater use and adoption of its Okta Identity Cloud platform.

As of its latest quarter, the company counted more than 9,400 organizations around the world as customers. Additionally, Okta now has more than 300 clients generating $500,000 in annual revenue, highlighting the growing demand from large enterprises for its cloud-based identity and access management software.

Okta should continue to enjoy a boost to its already-stellar financial performance in the year ahead, however its lofty price-to-sales ratio of 43 leaves it little room for error.

3. Cloudflare

Cloudflare (NYSE:NET), which provides web security and infrastructure services, ended 2020 as one of the big winners of the year, with shares of the cloud networking and security solution provider gaining 341%.

The San Francisco, California-based tech company benefitted from mounting demand for its cloud-based networking and cybersecurity services resulting from the surge in internet traffic during the COVID-19 outbreak.

NET stock, which rallied to a record high of $88.75 on Dec. 22, ended at $73.61 last night, earning the content delivery network and web security firm a valuation of $23.4 billion.

NET Daily

Cloudflare’s stock is likely to continue its remarkable performance in 2021 thanks to surging demand for its web security, content delivery, and enterprise networking services and solutions amid the current environment.

The network security firm said it had over 3.2 million customers as of the end of the third quarter, of which more than 100,000 are paying customers. Even more impressive, large customers that spend at least $100,000 annually jumped to 736.

Despite its nosebleed valuation levels—Cloudflare trades at a whopping price-to-sales ratio of 60—we expect it to remain one of the best-performing names in the fast-growing cloud and edge computing sector.

Latest comments

ETFs for Cybersecurities?
please suggest a cybersecurity stock in Indian stock market
does anyone have good pennystocks in euro's?
Cyren ltd? 50M market cap
Keep on overlooking BB. Who is seciring IoT again?
another example of the small man getting information when the informed start take profits
any small or medium cap specs?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.