Because widespread digitization has increased the risks of cyberattacks and privacy breaches significantly, cybersecurity companies are witnessing growing demand for their solutions from enterprises and governmental agencies. The favorable industry backdrop should benefit both Rapid7 (NASDAQ:RPD) and NetScout (NTCT). But let’s find out which of these stocks is a better buy now.Boston based Rapid7, Inc. (RPD) and NetScout Systems, Inc. (NTCT) in Westford, Mass., are two prominent companies that offer cybersecurity solutions. RPD provides services to collect, contextualize, and analyze security data to reduce threat exposure and detect compromise in real-time, while NTCT provides operational intelligence and performance analytics for service assurance and cybersecurity solutions. Both the companies serve technology, financial services, healthcare, manufacturing, retail, education, transportation, governmental agencies industries through direct sales forces and indirect channel partners.
The growing adoption of cloud computing and the accelerated pace of digital transformation of almost all industries have been facilitating rising incidences of cyberattacks and privacy breaches. As a result, companies offering cybersecurity solutions are witnessing heightened demand from enterprises to protect their data and privacy. Moreover, cloud-based deployment of cybersecurity solutions has been helping organizations to reduce costs associated with expensive hardware equipment for storage and other maintenance costs, driving the demand for such solutions even more. The global cybersecurity market is expected to grow at a 9.7% CAGR to reach $345.40 billion by 2026. And both RPD and NTCT will likely benefit from the industry tailwinds.
But while NTCT has gained 2.7% in price over the past three months, RPD has surged 42.9%. And in terms of the past nine months’ performance, RPD is a clear winner with 66.6% gains versus NTCT’s 22.3%. But, which of these stocks is a better pick now? Let’s find out.