The ever-evolving technology sector has truly transformed our lives but not without some hiccups. That's because cybercrime, which includes destruction of data, identity theft, spying and other illegal activities, poses a threat. Enterprises and government agencies are frequently targeted by hackers, and therefore have to adopt strict cyber security measures.
Over the past few years, high-profile business houses and government agencies have reported a significant rise in data breaches which, in turn, prompt them to impose tighter security measures.
The latest was a massive ransomware attack on May 12, which halted daily work at several companies, government offices and even hospitals across the globe. According to a report from cybersecurity firm FireEye Inc. FEYE , the attack, which persisted throughout the whole weekend, affected over 200,000 computers in at least 150 countries across the Americas, Europe, Russia and Asia over the following weekend.
Known as WannaCrypt or WannaCry, the malicious software reportedly seizes the control of computers and encrypted files with a password which only hackers have access to. After that, victims were asked to pay ransoms in order to regain control of their systems. The hackers demanded ransom in bitcoin.
The latest cyberattack proved that, whether government or private enterprise, most organizations around the world lack proper security measures.
Per the predictions of CSO, a provider of news, analysis and research on a broad range of security and risk management topics, cybercrime damages may cost the world a whopping $6 trillion annually by 2021, double from $3 trillion in 2015.
According to a joint report of Identity Theft Resource Center (ITRC) and CyberScout, 1,093 data breaches had been recorded in 2016, which was 40% higher than 780 reported in 2015.
Scope of Cyber Security Industry
The long list of data breaches puts the Internet security market in focus, as companies are beginning to realize the necessity of beefing up cyber safety measures.
Moreover, with rapid technological advancement, more organizations are adopting the "bring your own device" (BYOD) policy to enhance employee productivity with anytime, anywhere access. This trend, on the other hand, has made it necessary for companies to enforce stricter data security measures.
From being a niche industry a decade ago, cyber security has grown into a very important segment in the IT space. Various independent research firms forecast strong demand ahead. According to a Markets and Markets report, worldwide cybersecurity spending will reach $90 billion in 2017, $101 billion in 2018 and $170 billion by 2020. Gartner had earlier mentioned that IT security spending peaked to above $83 billion in 2016.
It should also be noted that cyber security companies are witnessing high single-digit growth, while overall IT spending is anticipated to grow just 2.7% year over year to $3.5 trillion in 2017, according to research firm Gartner.
This indicates that business houses and government agencies would rather compromise on other IT expenses than security measures, which, we believe, will enhance long-term prospects for cyber security providers.
Five Stocks That Can Change How We Protect Our Data
Though billions of dollars and data are lost due to cyber crime, there does appear to be a positive side to it. Cyber security companies stand to gain from data breach as the chances of security-related purchase increase.
While there are plenty of players in the industry, we would like to highlight five major companies that are projected to change the way we protect data.
Fortinet Inc.FTNT is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. The current-year EPS estimate has been revised upward to 41 cents from 35 cents, over the past 60 days. The EPS growth estimate is 84.3% for the current year. The Zacks Rank #2 (Buy) stock gained 30% value in the YTD period and has a Momentum Style Score of B.
Verisign Inc.VRSN , a global leader in domain names and Internet security, enables Internet navigation for many of the world's most recognized domain names and provides protection for websites and enterprises around the world. The current-year EPS estimate has been revised upward to $3.62 from $3.58, over the past 60 days. The EPS growth estimate is 9.2% for the current year. The Zacks Rank #2 stock gained 19.1% value in the YTD period and has a Momentum Style Score of B. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Splunk Inc.SPLK provides a software platform, which collects and indexes data and enables users to search, correlate, analyze, monitor and report on this data, all in real time. The Zacks Consensus Estimate for the stock has been revised upward for the current fiscal, in the past 30 days. The long-term EPS growth estimate is 42.3%. The Zacks Rank #2 stock gained 20.4% value in the YTD period and has a Momentum Style Score of B.
Palo Alto Networks, Inc.PANW offers a network security platform that allows enterprises, service providers, and government entities to secure their networks. The Zacks Consensus Estimate for the stock has been revised upward for the current fiscal, in the past 30 days. The EPS growth estimate is 51.3% for the current fiscal. The stock carries a Zacks Rank #2 and has a Momentum Style Score of B.
ManTech International Corp.MANT delivers a broad array of information technology and technical services solutions to the U.S. federal government customers, focusing primarily on critical national defense programs for the intelligence community and Department of Defense. The current-year EPS estimate has been revised upward to $1.50 from $1.47, over the past 30 days. The long-term EPS growth estimate is 8%. The stock carries a Zacks Rank #2 and has a Momentum Style Score of A.
Considering the huge growth opportunities, it makes sense to invest in this hot industry group as cybersecurity players are likely to witness sturdy growth, moving ahead.
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