3 Cybersecurity Stocks to Focus On Amid Reports Of Russian Hacking

Cybersecurity companies are benefiting from the heightening necessity of IT security solutions amid the COVID-19 pandemic-led remote-working and online learning wave. The trend has led to a rally in cyber security stocks so far this year.

These stocks will likely witness momentum again owing to the recent cyberattack reports on U.S. agencies by hackers that are suspected to work on behalf of the Russian government.

Per media sources, hackers gained access to U.S. Treasury and Commerce department systems through network management software provided by SolarWinds SWI. On Dec 13, the firm said that its Orion network monitoring products rolled out in March and June have become victim to a highly sophisticated, manual supply-chain attack.

Attacks Connected With Data Breach at FireEye

The attacks are connected with data breach at FireEye FEYE. In a Dec 8 blog posted by the company, the company’s CEO Kevin Mandia disclosed that attackers have stolen the “Red Team” tools used by the company’s officials for testing customer security.

FireEye believes the attack has been probably carried out by hackers from a foreign adversary, terming it a “highly sophisticated cyber threat actor.” The company couldn’t identify the country it suspects. However, according to various media reports, investigators doubt Russia for the act.

Cybersecurity Stocks to Gain

The silver lining to this episode would be the heightened demand for security-related purchases by both companies and governments that would be spurred by such a high-level security breach.

While the incident is a major jolt for FireEye as this could tarnish its reputation, it could bring other cybersecurity stocks back into the limelight.

Notably, the financial well-being, brand image and reputation of enterprises and governments are always exposed to the risk of cyber threats. Consequently, cybersecurity has become a mission-critical, high-profile requirement.

Clearly, cases of data breaches drive the need to beef up cyber-safety measures, thereby fueling demand for the services offered by Internet security companies.

Furthermore, as the number of coronavirus infections keeps surging in the United States, companies have notified employees to continue working remotely and now face the challenging task of adapting their security measures to meet the need of the hour.

Moreover, various independent research firms forecast stellar demand ahead. According to a Fortune Business Insights report, worldwide cybersecurity market size will reach $281.74 billion by 2027 from $112.01 billion in 2019, indicating a compounded annual growth rate of 12.6% during the period.

Stocks to Focus On

Considering the above-discussed factors, it makes sense to stay invested in this hot industry group as cybersecurity players are likely to witness sturdy growth in the near term.

Here we focus on three stocks that are anticipated to benefit from this elevated spending.

Qualys QLYS is benefiting from the surging demand for security and networking products amid the coronavirus crisis as a huge global workforce is working remotely. Accelerated digital transformations by organizations are also fueling demand for the Zacks Rank #2 (Buy) company’s cloud-based security solutions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for 2020 earnings has moved 7.6% north to $2.84 per share over the past 60 days. Qualys’ shares have been up 22.6%, year to date.

Qualys, Inc. Price and Consensus

Qualys, Inc. Price and Consensus

Qualys, Inc. price-consensus-chart | Qualys, Inc. Quote

Zscaler ZS is gaining from the rising demand for cyber-security solutions owing to the slew of data breaches. Increasing demand for privileged access security on digital transformation and cloud-migration strategies is a key growth driver.

The Zacks Rank #2 company’s portfolio strength boosts its competitive edge and helps add users. Furthermore, a strong presence across verticals, such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education, is a key catalyst.

The consensus mark for fiscal 2021 earnings is pegged at 37 cents per share, having been raised 27.6% in the past 30 days. Shares of Zscaler have soared 294.5%, in the year-to-date period.

Zscaler, Inc. Price and Consensus

Zscaler, Inc. Price and Consensus

Zscaler, Inc. price-consensus-chart | Zscaler, Inc. Quote

CrowdStrike CRWD is benefiting from increased necessity for security and networking products amid the COVID-19 pandemic-led remote-working trend, along with continued digital transformation and cloud-migration strategies adopted by organizations.

This Zacks Rank #2 company’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, fortifies its competitive edge and helps add users. Additionally, the acquisition of Preempt Security is anticipated to enhance CrowdStrike’s Zero Trust security capabilities.

The consensus mark for fiscal 2021 earnings has been revised upward to 22 cents per share from 6 cents in the past 30 days. Shares of the company have surged 248.5%, year to date.

CrowdStrike Holdings Inc. Price and Consensus CrowdStrike Holdings Inc. Price and Consensus

CrowdStrike Holdings Inc. price-consensus-chart | CrowdStrike Holdings Inc. Quote

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SolarWinds Corp. (SWI): Free Stock Analysis Report
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FireEye, Inc. (FEYE): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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