SFTC:CC - Top Cybersecurity Stocks for August 2023
2023-08-08 18:45:00 ET
The S&P/TSX Capped Information Technology Index was down 1.22% in late-morning trading on Tuesday, August 8. Today, I have my eyes on a top sub-sector in the technology space . Fortune Business Insights valued the global cybersecurity market at US$153 billion in 2022. That same report projects that this market will deliver a compound annual growth rate (CAGR) of 13% from 2023 through to 2030. It expects the market to cap out at US$424 billion by the end of the forecast period.
Today, I want to target three top cybersecurity stocks in the first half of August 2023.
This undervalued cybersecurity stock is the first equity I’d target in August
Open Text ( TSX:OTEX ) is a Waterloo-based company that provides information management software end solutions. Shares of this cybersecurity stock have plunged 8% month over month as of early afternoon trading on August 8. The stock is still up 18% so far in 2023.
This company released its fourth quarter (Q4) and full-year fiscal 2023 earnings last week on August 3. In Q4, it delivered revenue growth of 65% to $1.5 billion. Meanwhile, annual recurring revenues increased 56% to $1.2 billion. For the full year, Open Text posted revenue growth of 28% to $4.5 billion. Moreover, key investments in cloud, artificial intelligence, and security powered adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.5 billion.
Shares of Open Text currently possess a price-to-earnings (P/E) ratio of 32 . That puts this cybersecurity stock in favourable value territory compared to its industry peers. This stock offers a quarterly dividend of $0.25. That represents a 2.7% yield.
The former hardware giant has become a real player in the cybersecurity space
BlackBerry ( TSX:BB ) is another Waterloo-based technology company. At one point, this company held a dominant position in the global smartphone market. Today, it has transitioned into a primary focus on software. It boasts a footprint in the burgeoning automotive software and cybersecurity markets. Shares of BlackBerry have dipped 3.8% over the past month. The cybersecurity stock is still up 36% in the year-to-date period.
In Q1 2023, BlackBerry reported total revenue of $373 million. Meanwhile, its cybersecurity revenue was reported at $93 million, with a gross margin of 60%. Cybersecurity billings were reported at $122 million. That represented the fourth consecutive quarter of billings increases.
BlackBerry is on track for solid revenue growth going forward. Moreover, it is trading in favourable value territory compared to its industry peers.
One more cybersecurity stock that is worth snatching up this summer
Softchoice ( TSX:SFTC ) is the third and final cybersecurity stock I’d look to snatch up in the first half of August. This cybersecurity stock has plunged 15% over the past month. Its shares have now dropped 20% in 2023.
Investors can expect to see this company’s next batch of earnings this week. In Q1, Softchoice reported adjusted net income of $7.1 million — up 53% compared to the previous year. Adjusted earnings per share jumped 71% to $0.12. Meanwhile, adjusted EBITDA climbed 45% to $14.5 million.
This cybersecurity stock last had a P/E ratio of 30, which puts Softchoice in attractive value territory compared to the industry average. The company is geared up for strong earnings growth going forward.
The post Top Cybersecurity Stocks for August 2023 appeared first on The Motley Fool Canada .
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
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