This month’s list of new buys by the best mutual funds reveals that savvy investors want in on cybersecurity stocks. CrowdStrike (CRWD), Palo Alto Networks (PANW) and CyberArk Software (CYBR) all made this screen. And now CrowdStrike, Palo Alto and CyberArk stock are spearheading a new brigade of breakouts.
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CyberArk Leads Top-Rated Cybersecurity Stocks
The ubiquitous presence of cloud-based networks and the ever-rising tsunami of artificial intelligence cause security risks for large and small enterprises — and demand for leading cybersecurity stocks.
With the highest-possible 99 Composite Rating, CyberArk edges out CrowdStrike and Palo Alto Networks for top billing in the cybersecurity group. Gen Digital (GEN), which also made the latest list of new buys by the best mutual funds, ranks just behind its peers with a still-strong 96 rating.
Additionally, each of these four cybersecurity leaders earns a B- or better Accumulation/Distribution Rating, indicating solid buying by institutional investors over the last 13 weeks.
In another sign of leading demand, CyberArk outstrips its peers with a strong 2.1 up/down volume ratio. For that metric, anything over 1.0 points to demand.
Palo Alto Networks and Gen Digital both sport a 1.5 up/down volume ratio. CrowdStrike comes in below the 1.0 mark at 0.8.
| Company | Symbol | Comp Rating | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|
| CyberArk Software | (CYBR) | 99 | 82 | 94 | B | B |
| CrowdStrike | (CRWD) | 98 | 99 | 98 | A | B |
| Palo Alto Networks | (PANW) | 98 | 97 | 92 | A | B- |
| Gen Digital | (GEN) | 96 | 92 | 89 | A | B |
CyberArk Moves ‘Fearlessly Forward’ — With A Human Touch
Based in Israel, CyberArk focuses on identity security. The company focuses on privileged access accounts.
Such accounts have access to administrative tasks and other highly sensitive areas within an organization. CyberArk claims to provide the most comprehensive security offering for any identity — human or machine — across business applications, distributed workforces and hybrid cloud environments.
Companies ranging from network giant Cisco Systems (CSCO) to video game maker Capcom use CyberArk to protect critical assets.
Meanwhile, last month CyberArk released a video series titled “Fearlessly Forward.” The series focuses on the people behind cybersecurity and the human connections forged to secure organizations in a cloud-based, always connected world where potential identity-based breaches are a constant threat. The first episode features health insurer Aflac (AFL), a CyberArk customer since 2014.
Earnings Growth Of 1,223% Projected
Revenue growth for CyberArk ranged from 24% to 37% over the last five quarters. On May 2, the company posted a third straight quarter of accelerating sales growth, to $221.6 million, a 37% jump over the prior-year quarter.
On the earnings front, the cybersecurity firm has seen a sharp turnaround in recent quarters. After declining profits in 2022, CyberArk delivered a 355% increase in earnings to $1.12 per share in 2023.
For the full year, analysts expect an 81% gain to $2.03 per share, followed by a 61% increase to $3.26 a share in 2025.
For 2024’s first quarter, the company posted earnings of 75 cents a share, reversing from a loss in the prior year’s quarter. With second-quarter earnings expected in early August, Wall Street forecasts a whopping 1,223% jump to 40 cents a share.
Two Magnificent Seven Stocks Battle For Two Crowns. One Grabs Both.
CYBR Stock Nears Breakout To All-Time High
CyberArk has formed a second-stage consolidation showing a 283 buy point. In a sign of rising technical strength, both the 50-day moving average and the relative strength line have started trending upward. Plus, the 21-day exponentional moving average has crossed back above the 50-day line.
A breakout would lift CyberArk stock to a record high.
Meanwhile, CrowdStrike stock has formed a string of tight weeks after gapping up to clear a 358.84 buy point in a cup with handle in June. The tight area could offer a chance for investors to add shares.
Palo Alto Networks continues to rebuild after a sharp drop below its 10-week line in February. But after posting a string of up weeks, Palo Alto stock has climbed solidly back above that benchmark line, which has turned higher. The relative strength line has also perked up.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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