The 3 Best Cybersecurity Stocks to Buy in August
Out of all the market ideas available, the best cybersecurity stocks to buy practically sell themselves. Sure, everyone talks about the broader integration of digital technologies across the globe. However, as access to connectivity rises, so do vulnerabilities for nefarious actions.
You don’t want to think poorly of humanity at large. Unfortunately, the vast world of the Internet attracts digital criminals, which cynically bodes well for cybersecurity stocks with growth potential. According to Cybersecurity Ventures, the damage resulting from data breaches might hit $10.5 trillion annually by 2025. What’s more worrying is that as connectivity solutions rise in scope and scale, the know-how and technology to disrupt individuals and institutions likewise accelerate. Therefore, investors should consider must-buy cybersecurity stocks. Sadly, circumstances are only going to get worse.
On that sobering note, below are the top cybersecurity stocks for August to consider.
CrowdStrike (CRWD)
Headquartered in Austin, Texas, CrowdStrike (NASDAQ:CRWD) is one of the more well-known ideas for the best cybersecurity stocks to buy. Per its public profile, CrowdStrike provides cloud workload and endpoint security, threat intelligence, and cyberattack response services. Since the beginning of this year, CRWD gained over 41% of its equity value. However, in the trailing year, it’s down nearly 22%, thus symbolizing a relative discount.
To be fair, CRWD runs a little hot in terms of traditional valuation metrics. For example, shares trade at 60.42x forward earnings. However, the broader software sector runs a forward multiple of 26.81. Nevertheless, what makes CrowdStrike one of the top cybersecurity stocks for Aug. is its robust growth machinery. In particular, its three-year sales expansion rate (per-share basis) clocks in at 43.5%, above 91.08% of sector rivals.
Finally, analysts love CRWD, pegging it as a consensus strong buy. This assessment breaks down as 28 buys, two holds and zero sells. Also, the experts’ average price target lands at $177.71, implying nearly 22% upside. Thus, it’s easily one of the cybersecurity stocks with growth potential.
Palo Alto Networks (PANW)
Based in Santa Clara, California, Palo Alto Networks (NASDAQ:PANW) ranks among the elite entities for best cybersecurity stocks to buy. Per its corporate profile, Palo Alto’s core product is a platform that includes advanced firewalls and cloud-based solutions that extend said firewalls to cover other aspects of the digital security ecosystem. Further, the company serves over 70,000 organizations across over 150 nations.
Unsurprisingly, market demand for PANW has been robust. Since the Jan. opener, shares gained nearly 53%. In the past 365 days, they’re up nearly 27%. Still, the strong chart performance comes at a cost. Right now, shares trade at 43.28x forward earnings, which again is overvalued relative to the software industry.
However, the benefit to Palo Alto is that in addition to its solid three-year revenue growth rate of 22.1%, it’s a profitable enterprise. Its trailing-year net margin is modest but positive at 3.32%. Plus, PANW gets all the love, with analysts pegging it a consensus strong buy. Overall, their average price target comes in at $262, implying nearly 24% upside potential. It’s a great candidate for must-buy cybersecurity stocks.
Okta (OKTA)
Hailing from San Francisco, California, Okta (NASDAQ:OKTA) is an identity and access management firm. In particular, the company provides cloud software that helps its enterprise-level clients manage and secure user authentication into applications. As well, Okta provides means for developers to build identity controls for access to various portals and devices.
So far this year, OKTA has only seen modest gains, up less than 3% since the beginning of this year. Over the trailing one-year period, shares tumbled almost 30%. Still, for gamblers of otherwise leading cybersecurity stocks, OKTA could be intriguing.
On the financial end, the company’s biggest strengths lie in its top line. Over the past three years, it posted revenue growth of 33%, beating out 86.26% of its peers. And while it’s not the most discounted idea, OKTA trades at 2.1x book value, below the sector median of 2.79x. Lastly, analysts view the firm favorably, pegging shares a moderate buy. Overall, the experts’ price target stands at $94.50, implying over 32% upside potential. Thus, it could be one of the best cybersecurity stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
