Source: BeeBright / Shutterstock
As more of the world's technology moves online, the demand for buying cybersecurity stocks will continue to grow. As it accounts for nearly every major part of tech companies' operational expenditures, it's no wonder the market is now valued at more than $200 billion and set to continue growing at a compound annual growth rate (CAGR) of nearly 10%. Used by cloud computing services, B2B software companies, and AI companies, cybersecurity has become essential to providing stability and customer satisfaction.
Despite the importance of cybersecurity, it is a relatively small field compared to other technologies. Therefore, identifying growing winners in such emerging industries can easily become a winning strategy for smart investors. Here are his top three cybersecurity stocks to buy now, poised for big stock gains in 2025. Who knows, maybe these companies will let you join his million dollar club.
CrowdStrike (CRWD)
Image credit: Michael Vi / Shutterstock
cloud strike (NASDAQ:CRWD) is an American cybersecurity company that is pioneering the integration of AI into security services. The company's stock has already returned 40% this year, and analysts remain bullish. Wall Street currently has an average price target of $399.03 and a high price target of $540. These targets represent 15% and 60% upside from the stock's current price.
This company has done a great job with its unique approach to cybersecurity. Build a single mesh network so everyone can benefit from any threat, regardless of who receives it. This creates an efficient, scalable platform called Falcon that identifies and neutralizes threats without human intervention. This innovative and resilient business model is evidenced by a 34% year-over-year increase in annual recurring revenue (ARR) in the last quarter.
As you would expect from a company with a 65% revenue CAGR over five years, the stock is trading at a high multiple. CRWD stock trades at 27.5 times sales and 88.5 times expected earnings. But given its current focus on hypergrowth, there's no doubt that CRWD is one of the best cybersecurity stocks to buy for those looking to join the billionaire's club in 2025. do not have.
Palo Alto Networks (PANW)
Source: Sundry Photography / Shutterstock.com
palo alto networks (NASDAQ:Bread W) was originally in the firewall business, but recently moved into cybersecurity. The average price target of Wall Street analysts is $335.87, about 5.0% above the current price. TheStreet's higher target for PANW is as high as $405 per share.
The company started in network security and firewalls, which may give you an idea of how long Palo Alto has been around. However, it has recently shifted its focus to cyber security and cloud security, reflecting the company's determination to expand into new markets and strengthen its competitiveness. One of the company's biggest advances is the integration of AI into its services with the new Precision AI™. This allows customers to increase their ability to block more advanced threats. For investors looking for potential momentum, Palo Alto has been in the spotlight lately since the headlines that former House Speaker Nancy Pelosi took a bullish call on his position on up to $1.25 million worth of stock.
With its current business model shift, it's no wonder the stock has taken a big hit to its earnings and valuation metrics over the past quarter. However, PANW's current sales are his 14.8x and his future earnings are 51x, opening up opportunities for companies that are relatively cheap when compared to CRWD. While CRWD brings more returns to investors, all investors should stay tuned to PANW's next earnings report on May 20th to see how PANW intends to continue evolving in the future. It is recommended.
Sentinel One(S)
Image source: Tada Images / Shutterstock.com
meanwhile sentinel one (New York Stock Exchange:S) is a much smaller company than CrowdStrike or Palo Alto Networks, but this fast-growing cybersecurity firm is definitely worth paying attention to. So far, this stock has flown under the radar, with its share price down nearly 15% and lagging both its sector and benchmarks. S&P500Still, analysts remain hopeful about Sentinel One, with a price target of $40, nearly double the current share price.
SentinelOne's products are often compared to the likes of Crowdstrike, whose Falcon platform is often seen competing with SentinelOne's Singularity. However, upon closer inspection, it is interesting to see Singularity's advantage in relatively rapid cybersecurity response and the ability to operate without an internet connection. There are some deficiencies in scalability, but we believe these are largely made up for by SentinelOne's extremely sticky and satisfied customer base, and potential channels for SentinelOne to expand its market reach in the future.
SentinelOne recently reported strong financial results. Not only did the company report industry-leading 47% revenue growth, but its operating margin improved by more than 30 points year-over-year. Investors will definitely keep an eye on this high-risk, high-reward company, given that SentinelOne is already making improvements to move into larger, recurring companies to strengthen its competitiveness. Should.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to the InvestorPlace.com Publishing Guidelines.
