PANW: 3 Cybersecurity Stocks Protecting the Digital World

As the digital landscape expands, cybersecurity has become an essential focus for businesses, governments, and individuals. The surge in cyber threats, including ransomware and phishing attacks, has amplified the demand for robust cybersecurity solutions. This has resulted in unprecedented demand for cybersecurity company’s services.

Therefore, investors might consider keeping an eye on three quality cybersecurity stocks: CrowdStrike Holdings, Inc. (CRWD), Palo Alto Networks, Inc. (PANW), and Fortinet, Inc. (FTNT) for long-term growth opportunities.

With the rise in ransomware attacks causing billions has been a common scene this year. In the third quarter of 2024, an average of 1,876 cyber-attacks per organization was recorded globally, an increase of 75% year-over-year.

North America recorded the most published ransomware attacks, accounting for 57%. Gartner predicts that worldwide spending on information security is anticipated to be $212 billion by 2025, marking it a 15.1% increase from 2024.

Cybersecurity firms are in charge of innovative technologies, leveraging AI and machine learning to provide proactive threat detection and mitigation. This process will analyze vast amounts of data from various sources to identify patterns and anomalies that could indicate potential attacks, enabling security teams to take action before significant damage occurs.

Moreover, the global cybersecurity market is projected to reach $562.72 billion by 2032, growing at a CAGR of 14.3%. This creates a promising outlook for established players and emerging firms in the sector.

Let’s now discuss the fundamentals of the three Software – Security stocks highlighted above, starting with number three.

Stock #3: CrowdStrike Holdings, Inc. (CRWD)

2024 STOCK MARKET OUTLOOK

CRWD is a global cybersecurity company that provides cloud-delivered protection of endpoints, cloud workloads, identity, and data. The company’s Falcon platform is designed for cybersecurity consolidation and is purpose-built to stop breaches. The platforms collect and integrate data from across the enterprise, including endpoints, cloud workloads, identities, and third-party sources.

On December 4, CRWD announced its expanded integration with Amazon Web Services (AWS) to help secure end-to-end AI innovation in the cloud. This integration brings end-to-end visibility and protection across the entire AI ecosystem built on AWS with the help of CRWD’s Falcon cybersecurity platform.

On November 7, CRWD announced an expanded distribution partnership with Ignition Technology, bringing the CrowdStrike Falcon® cybersecurity platform to Ignition’s partner base in Ireland. This partnership should enable CRWD to continue expanding its global footprint all across Europe.

CRWD’s revenue for the third quarter (ended October 31, 2024) increased 28.5% year-over-year to $1.01 billion. The company reported a gross profit of $755.09 million, indicating an 11% growth from the prior year quarter. Its non-GAAP income from operations grew 16.1% from the same period last year to $194.92 million. CRWD’s attributable non-GAAP net income came in at $234.26 million and $0.93 per share, up 17.6% and 13.4% year-over-year, respectively.

For the full year 2025, CRWD expects total revenue to be between $3.92 billion and $3.93 billion and non-GAAP income from operations to range from $804.40 million to $809.40 million. The company also expects non-GAAP net income to fall between $937.50 million and $942.60 million, or $3.74 and $3.76 per share.

Analysts expect CRWD’s revenue for the fourth quarter (ending January 2025) to increase 22.4% year-over-year to $1.03 billion. However, the consensus EPS estimate of $0.86 for the same period indicates a 9.6% year-over-year decline. For the fiscal year ending January 2025, Street expects CRWD’s revenue and EPS to grow 28.6% and 21.7% from the prior year to $3.93 billion and $3.76, respectively.

Over the past year, the stock has surged 36.8%, closing the last trading session at $355.37.

CRWD’s stance is apparent in its POWR Ratings. The stock has a B grade for Growth and Quality. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

Among the 20 stocks in the A-rated Software – Security industry, it is ranked #16. Click here to see the additional CRWD ratings (Value, Momentum, Stability, and Sentiment).

Stock #2: Palo Alto Networks, Inc. (PANW)

PANW is a provider of cybersecurity solutions. The company’s platforms and services are designed to secure enterprise users, networks, clouds, and endpoints through cybersecurity measures backed by artificial intelligence and automation. PANW focuses on four areas: Network Security; Cloud Security; Security Operations and Threat Intelligence; and Security Consulting.

On October 21, PANW introduced new OT security solutions powered by Precision AI to protect remote OT operations, mitigate risk for critical OT assets, and extend security into harsh industrial environments. This new feature also helps customers simplify operations and increase efficiency with organizations to address vulnerabilities in real time without disruptive downtime.

In the same month, PANW announced the expansion of its strategic alliance with Deloitte in the EMEA and JAPAC regions. Deloitte’s agreement to adopt PANW’s cloud and network security platforms offers mutual customers a unified platform and helps them achieve better cybersecurity solutions.

For the fiscal 2025 first quarter that ended on October 31, 2024, PANW’s total revenue increased 13.9% year-over-year to $2.14 billion. The company’s gross profit came in at $1.58 billion, reflecting an increase of 12.8% from the prior-year quarter. In addition, its non-GAAP net income amounted to $544.90 million and $1.56 per share, reflecting increases of 16.9% and 13% year-over-year, respectively.

Looking ahead, PANW anticipates revenue for fiscal year 2025 to fall between $9.12 billion and $9.17 billion, reflecting a year-over-year growth of 14%. The company also projects non-GAAP earnings per share to range from $6.26 to $6.39.

The consensus revenue estimate of $2.24 billion for the fiscal second quarter (ending January 2025) represents a 13.4% increase year-over-year. The consensus EPS estimate of $0.78 for the same quarter indicates a 6.7% improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.

The stock has gained 34% over the past nine months and 20.6% over the past year to close the last trading session at $191.04.

PANW’s fundamentals are reflected in its POWR Ratings. The stock has a B grade for Sentiment and Quality. It is ranked #13 out of 20 stocks in the same A-rated industry.

Beyond what is stated above, we’ve also rated PANW for Growth, Value, Momentum, and Stability. Get all PANW’s ratings here.

Stock #1: Fortinet, Inc. (FTNT)

FTNT provides cybersecurity and convergence of networking and security solutions worldwide. The company offers secure networking solutions focusing on the convergence of networking and security, network firewall solutions, wireless LAN solutions, and secure connectivity solutions.

On December 3, FTNT announced the launch of FortiAppSec Cloud, a new cloud-delivered platform that integrates key web application security and performance management tools into a single offering. This launch converges AI-powered security and key performance tools on a unified platform, which simplifies web application security management and reduces risk and costs.

On November 15, FTNT announced the opening of a new innovation hub in Atlanta, Georgia. This newly acquired Innovation Hub of the company will include FTNT’s Cloud Point of Presence, cyber training facility, and executive briefing center and strengthen the user experience.

During the third quarter of 2024, which ended on September 30, FTNT’s total revenues increased 13% year-over-year to $1.51 billion. Its total gross profit rose 22.4% from the year-ago value to $1.24 billion.

Its non-GAAP operating income stood at $544.70 million, up 68.7% year-over-year, while its non-GAAP net income amounted to $487.60 million, representing an increase of 50.7% from the last year. Also, the company’s non-GAAP EPS for the quarter increased 53.7% year-over-year to $0.63.

According to the company’s guidance, FTNT forecasts fiscal year 2024 revenue to range from $5.86 billion to $5.92 billion, with billings between $6.43 billion and $6.53 billion. In addition, it anticipates its non-GAAP gross margin to fall between 80.3% and 81.3% and non-GAAP net income per share in the range of $2.20 and $2.28.

Street expects FTNT’s revenue for the fiscal fourth quarter (ending December 2024) to increase 12.7% year-over-year to $1.60 billion. Moreover, its EPS estimate of $0.61 for the same period indicates a 19.1% year-over-year growth. In addition, it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is excellent.

FTNT shares have surged 69.5% over the past year and 60.7% over the past six months to close the last trading session at $95.10.

FTNT’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.

FTNT has an A grade for Quality and B for Sentiment. It is ranked #7 in the Software – Security industry. Click here to see the other ratings of FTNT for Growth, Value, Momentum, and Stability.

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PANW shares were trading at $190.02 per share on Thursday afternoon, up $1.26 (+0.67%). Year-to-date, PANW has gained 28.88%, versus a 24.98% rise in the benchmark S&P 500 index during the same period.