CNNE - The 3 Smartest Cybersecurity Stocks to Buy With $5000 Right Now

2024-06-28 06:57:00 ET

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

When it comes to cybersecurity issues, we’re all sitting ducks. That’s why investors should always dig into some of the top cybersecurity stocks to buy.

Governments, companies, cities, hospitals, consumers, and schools are still grossly unprepared for attacks. Most recently, CDK Global , a company that provides U.S. auto dealers with software for sales management, was shut down because of new attacks.

As noted by CBS News at the time: “The outage is disrupting roughly 15,000 car sellers that depend on CDK’s dealer management software to run their businesses, including vehicle sales. Some dealership employees have resorted to pen and paper to handle transactions but said most deals had ground to a halt. CDK has not indicated when its systems will be back up and running, but suggested the outage could last several days.”

While that’s bad news for government agencies, companies, schools, and millions of people, it’s great news for cybersecurity stocks to buy.

Palo Alto Networks ( PANW )

Since bottoming out at around $289, Palo Alto Networks (NASDAQ: PANW ) is up to $325.26 following the attack on CKD.

Helping, analysts at D.A. Davidson just initiated a buy rating on the stock with a price target of $380, which would refill the stock’s bearish gap.

Analysts at Argus also raised their price target on PANW to $348. “The analyst highlighted the increasing threats in the cybersecurity environment, including potential risks and opportunities presented by generative AI technology,” says Investing.com.

Earnings haven’t been too shabby either. In its third quarter, EPS of $1.23 beat by 7 cents. Revenue of $1.98 billion — up 15.1% year over year — beat by $10 million.

Moving forward, the company expects fourth-quarter billings to range from $3.43 billion to $3.48 billion , which is a year-over-year growth range of 9% to 10%. It also expects to see total revenue of $2.15 billion to $2.17 billion, as compared to estimates of $2.16 billion.

Rapid7 ( RPD )

Rapid7 (NASDAQ: RPD ) is also gaining momentum with the latest CDK attacks.

Helping, the company just announced that its Rapid7 AI Engine used by its global security operations center (SOC) teams now includes new generative artificial intelligence ( AI ) capabilities, transforming the way the company delivers its leading managed detection and response (MDR) services.

Even better, Steven Cohen’s Point72 just increased its stake in RPD by 189% by picking up another 2.04 million shares in late May. Dmitry Balyasny’s Balyasny Asset Management also increased its stake in RPD by nearly 55%. Jim Simons’ Renaissance Technologies also bought 138,600 shares at the end of March.

In addition, activist investors at Jana Partners have a new stake in the RPD stock and have plans to push for a sale. Also, Jana is reportedly working with Cannae Holdings (NYSE: CNNE ) to potentially acquire RPD, as noted by Seeking Alpha .

CyberArk Software ( CYBR )

The last time I highlighted an opportunity in CyberArk Software (NASDAQ: CYBR ), I said I’d “use weakness as an opportunity. After failing at overhead resistance at $250, CYBR pulled back to $225, where it appears to have caught strong support. From here, I’d like to see it initially retest $250.”

That was on June 6 as CYBR traded at around $237. Today, it’s up to $262.80 and could push even higher with growing cybersecurity threats.

Earnings have been solid. In its first quarter, the company posted EPS of 75 cents, which beat by 48 cents. Revenue of $221.6 million — up 37% year over year — beat by $8.38 million. The subscription portion of its annual recurring revenue ( ARR ) jumped 54% to $621 million year over year. Even total ARR jumped 69% to $156.2 million.

Baird analysts are also out with an outperform rating on the CYBR stock with a price target of $295 a share.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .

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