Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Tenable (NASDAQ:TENB) and its peers.
Cybersecurity continues to be one of the fastest-growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud-based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location.
The 9 cybersecurity stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.5% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.4% since the latest earnings results.
Tenable (NASDAQ:TENB)
Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.
Tenable reported revenues of $227.1 million, up 12.7% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a satisfactory quarter for the company with full-year EPS guidance exceeding analysts’ expectations but a significant miss of analysts’ annual recurring revenue estimates.
"We delivered strong results in Q3, surpassing expectations on both the top and bottom line," said Amit Yoran, Chairman and CEO of Tenable.
Unsurprisingly, the stock is down 1.7% since reporting and currently trades at $40.54.
Is now the time to buy Tenable? Access our full analysis of the earnings results here, it’s free.
Best Q3: Okta (NASDAQ:OKTA)
Founded during the aftermath of the financial crisis in 2009, Okta (NASDAQ:OKTA) is a cloud-based software-as-a-service platform that helps companies manage identity for their employees and customers.
Okta reported revenues of $665 million, up 13.9% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 2.4% since reporting. It currently trades at $83.71.
Is now the time to buy Okta? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: SentinelOne (NYSE:S)
With roots in the Israeli cyber intelligence community, SentinelOne (NYSE:S) provides software to help organizations efficiently detect, prevent, and investigate cyber attacks.
SentinelOne reported revenues of $210.6 million, up 28.3% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.
SentinelOne delivered the weakest performance against analyst estimates in the group. The company added 77 enterprise customers paying more than $100,000 annually to reach a total of 1,310. As expected, the stock is down 21.2% since the results and currently trades at $22.62.
Read our full analysis of SentinelOne’s results here.
Zscaler (NASDAQ:ZS)
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Zscaler reported revenues of $628 million, up 26.4% year on year. This print topped analysts’ expectations by 3.7%. Overall, it was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
The stock is down 9.6% since reporting and currently trades at $188.55.
Read our full, actionable report on Zscaler here, it’s free.
Varonis (NASDAQ:VRNS)
Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.
Varonis reported revenues of $148.1 million, up 21.1% year on year. This number beat analysts’ expectations by 4.7%. It was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Varonis pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 22.4% since reporting and currently trades at $45.57.
Read our full, actionable report on Varonis here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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