Security stocks expected to gain more strength as network breaches continue
On Friday, Uber (UBER) said that a recent security breach didn’t involve a leak of any sensitive data of its customers or drivers. Still, the fact that a company of Uber’s (UBER) size can get hacked serves notice that network security is a matter can’t be ignored by any organization.
It’s incidents like this that continue to provide opportunities for companies in the cybersecurity sector. And the market is such that MKM Partners analyst Catharine Trebnick on Friday initiated covered of five big-name security companies with buy ratings: Fortinet (NASDAQ:FTNT), Zscaler (NASDAQ:ZS), Palo Alto Networks (NASDAQ:PANW), CyberArk (CYBR) and CrowdStrike Holdings (NASDAQ:CRWD).
In addition to putting a buy rating on Fortinet (FTNT), Trebnick set a price target of $70 a share on the company’s stock. Trebnick said that in the current business environment, Fortinet (FTNT) has several competitive advantages that put it in a strong position in the security market.
Among those are a single “pane of glass” that allows for monitoring of network traffic across multiple devices, a broad portfolio of products and what Trebnick said was a path for Fortinet (FTNT) to reach $10B in billings by 2025.
Trebnick said that Zscaler (ZS) presents “an attractive long-term growth opportunity” as it provides “seamless protection regardless of location, geography, office, home and/or public WiFI [networks].” Trebnick set a price target of $225 a share on Zscaler’s (ZS) stock, saying that the company’s “competitive advantages are sustainable” and will enable it grow revenue at 30% year-over-year for the foreseeable future.
For CyberArk (CYBR), Trebnick set a $190-a-share price target on the company’s stock, and said that its transition to a subscription business model “came in ahead of plan,” and that its annual recurring revenue growth is coming in higher than its overall revenue growth rate. Trebnick added that with about 8,000 customers now, CyberArk (CYBR) is on a path to grow by 20,000 customers in 2025.
For CrowdStrike (CRWD), Trebnick said the company has “one of the most comprehensive cloud-native platforms” in the cybersecurity industry. Trebnick said this allows CrowdStrike (CRWD) to move beyond endpoint security and into areas such as cloud security and identity protection.
In addition to setting a buy rating on CrowdStrike (CRWD), Trebnick put a price target of $240 a share on the company’s stock.
With regards to Palo Alto Networks (PANW), Trebnick said Chief Executive Nikesh Arora “has been instrumental in transitioning Palo Alto Networks to a SaaS [software-as-a-service] based model focused on next-generation cybersecurity.” Trebnick said with its annual recurring revenue from next-generation security offerings rising to $1.9B in its most-recent quarter, the company should be able to expand its market share and cloud-based services gain more popularity with businesses.
Trebnick also set a $250-a-share price target on Palo Alto Networks (PANW) stock.