3 Cybersecurity Stocks to Buy Now for Long-Term Opportunities
Cybersecurity encompasses comprehensive security measures designed to protect systems, networks and programs from digital attacks. These attacks often aim to access, alter, or destroy sensitive information, extort money from users through ransomware, or disrupt the integrity of normal business operations.
The widespread adoption of artificial intelligence (AI), IoT devices, and increased digitization across both public and private sectors has heightened vulnerabilities and expanded attack surfaces, necessitating the development of advanced security solutions. This space focuses on companies that offer integrated protection against evolving security threats while simplifying IT security infrastructure.
These firms provide solutions to safeguard applications, networks, and cloud computing environments. Their offerings include application-specific integrated circuits, hardware architecture, operating systems, and associated security and networking functions, ensuring robust defenses against cyberattacks.
We recommend three cybersecurity stocks for long-term investment purposes to reap maximum benefits. These are CyberArk Software Ltd. CYBR, Okta Inc. OKTA and Qualys Inc. QLYS. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks in the past three months.
Image Source: Zacks Investment Research
Zacks Rank #1 CyberArk Software is benefiting from the rising demand for cybersecurity and privileged access security solutions due to the long list of data breaches and increasing digital transformation strategies.
A strong presence across verticals, such as banking, healthcare, government and utilities, is safeguarding CYBR from the adverse effects of softening IT spending. CYBR's strategic mix shift toward software-as-a-service and subscription-based solutions is driving top-line growth.
CyberArk is gaining customer accounts, which contributes to its revenues. The vast customer base presents the company with an opportunity to upsell products within its installed user base. Furthermore, in the last few quarters, CYBR has been able to close a significant number of seven-figure deals.
The growing number of large deals in the revenue mix is helpful as it increases deferred revenues and visibility. Moreover, any product refresh brings in additional dollars as every enterprise attempts to keep its threat management infrastructure updated. These factors in turn support CYBR's top line.
CyberArk Software has an expected revenue and earnings growth rate of 31.9% and 25.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.6% in the last 30 days.
Zacks Rank #2 Okta operates as an identity partner in the United States and internationally. OKTA offers a suite of products and services used to manage and secure identities, such as Single Sign-On, which enables users to access applications in the cloud or on-premises from various devices.OKTA also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization.
OKTA's Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data, while API Access Management enables organizations to secure APIs. Access Gateway enables organizations to extend Workforce Identity Cloud, and Okta Device Access enables end users to securely log in to devices with Okta credentials.
OKTA has expected revenue and earnings growth rates of 9.4% and 16.4%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the last seven days.
Zacks Rank #1 Qualys is benefiting from the increasing demand for cloud-based cybersecurity solutions amid growing cyber threats and digital transformation initiatives. With a diverse customer base that includes enterprises, SMBs and government entities, QLYS maintains a balanced customer mix, which keeps it resilient against fluctuations in IT spending.
QLYS' continued innovation and focus on expanding product capabilities position it well to navigate market challenges and sustain long-term growth despite potential macroeconomic disruptions. A continuous increase in Vulnerability Management, Detection and Response to customer penetration is an upside.
Qualys' strategic acquisitions are pivotal in driving its growth trajectory. Since its inception, the company has acquired seven companies, of which Blue Hexagon was acquired in November 2022. Blue Hexagon's AI/ML capabilities enhanced QLYS' threat detection and response solutions, bolstering its cybersecurity offerings.
Qualys has expected revenue and earnings growth rates of 7.3% and 0.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last seven days.
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Qualys, Inc. (QLYS) : Free Stock Analysis Report
CyberArk Software Ltd. (CYBR) : Free Stock Analysis Report
Okta, Inc. (OKTA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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