The technology sector continues to drive the overall market higher, with cybersecurity stocks presenting intriguing setups. Software infrastructure and cybersecurity stocks have performed modestly year-to-date, aligning with the broader market. The Amplify Cybersecurity ETF NASDAQ: HACK is up nearly 8% YTD, reflecting this trend.
Cybersecurity became a critical focus with the rise of cyber threats and breaches, impacting businesses and governments globally. High-profile attacks and increasing digitalization have emphasized the need for robust cybersecurity measures, ensuring the sector's relevance and growth potential.
While much of the tech sector's attention has been on AI-related innovation, several cybersecurity stocks have shown fundamental solid performance, with growing earnings and favorable risk-reward setups from a technical analysis perspective. Here are three cybersecurity stocks setting up well for a potential buy opportunity.
CrowdStrike: Leading the Cybersecurity Charge
$390.71 +1.03 (+0.26%) (As of 07/8/2024 ET)
- 52-Week Range
- $140.52
▼
$397.12 - P/E Ratio
- 737.20
- Price Target
- $382.35
CrowdStrike Holdings, Inc. NASDAQ: CRWDis a leading multinational cybersecurity company based in Austin, Texas. It offers security solutions for cloud-based workloads, endpoint security, threat intelligence, and cyber attack response. As the third-largest holding in the HACK ETF, CrowdStrike is one of the largest cybersecurity companies globally.
CRWD is one of the Top-Rated stocks and projects an earnings growth of 55% for the full year. The stock has significantly outperformed the sector, industry, and overall market this year with an impressive 50% return YTD. CRWD is trading near its all-time high, consolidating in a bullish formation above prior resistance, indicating a potential breakout.
Zscaler's Recent Surge: Momentum Shift
$201.63 -0.02 (-0.01%) (As of 07/8/2024 ET)
- 52-Week Range
- $131.59
▼
$259.61 - Price Target
- $225.21
Zscaler, Inc. NASDAQ: ZS is a prominent cloud security company that helps organizations securely transform their networks and applications for the digital age. Unlike CrowdStrike, Zscaler has underperformed this year, with its stock down over 11% YTD. However, momentum has shifted for the stock.
After bottoming out near the end of May, ZS has surged almost 20%, reclaiming its critical moving averages and indicating a change in momentum and trend. Zscaler last announced its earnings data on May 30, 2024, reporting $0.15 earnings per share for the quarter, beating the consensus estimate of ($0.24) by $0.39. The company had revenue of $553.20 million for the quarter, compared to analyst estimates of $535.55 million. Analysts are bullish on the stock, with a Moderate Buy rating and a price target forecasting over 15% upside.
Fortinet Stock: What Analysts Predict for the Coming Quarter
$60.11 -0.98 (-1.60%) (As of 07/8/2024 ET)
- 52-Week Range
- $44.12
▼
$81.24 - P/E Ratio
- 39.29
- Price Target
- $70.03
Fortinet Inc. NASDAQ: FTNT is a leading provider of cybersecurity solutions for businesses, governments, and service providers. Its products and services help organizations protect their networks, data, and applications from cyber threats.
From a technical analysis perspective, FTNT has an interesting setup as it consolidates in a contracting range with converging key SMAs. Having pulled back significantly from its 52-week high, a break above the current consolidation might signal significant upward momentum for the stock in the third quarter.
Fortinet last issued its quarterly earnings results on May 2, 2024, reporting $0.43 per share, topping the consensus estimate of $0.38 by $0.05. The company had revenue of $1.35 billion for the quarter, compared to the consensus estimate of $1.34 billion, marking a 7.2% increase year-over-year. Analysts have a consensus hold rating for FTNT, with a price target forecasting an almost 16% upside for the stock.
Cybersecurity Sector Outlook: Promising Gains in the Second Half of 2024
The cybersecurity sector, driven by ongoing digitalization and rising cyber threats, remains crucial and poised for continued growth. While AI innovations dominate headlines, cybersecurity stocks like CrowdStrike, Zscaler, and Fortinet present compelling investment and momentum trading opportunities. Investors and participants might want to consider these stocks, particularly for sector exposure, as the sector could see significant gains in the year's second half.
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