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Protect Your Portfolio with These 3 Buy-Rated Cybersecurity Stocks

Protect Your Portfolio with These 3 Buy-Rated Cybersecurity Stocks

Posted On October 26, 2021 1:54 pm
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The popularity of hybrid work structures and digitization trends across almost every sector have fostered increasing use of cloud-based and digital solutions, bringing greater risks of cyber threats. According to the Identity Theft Resource Center (ITRC), the frequency of data breaches so far this year has already exceeded the 2020 total.

On the bright side, people are becoming increasingly cognizant of the need for cybersecurity. Governments and private organizations worldwide are investing significantly to enhance their security infrastructure and safeguard against potential thefts. Driven by the increasing demand, the global cybersecurity industry is expected to increase at a 10.9% CAGR  from 2021 – 2028. Earlier this year, President Biden  issued an executive order seeking to strengthen national cybersecurity and protect government networks following the ransomware attacks on the Colonial Pipeline. Federal Agencies reminded corporates and businesses of their obligation to keep up with the industry standards for cybersecurity after the Federal Trade Commission (FTC) upgraded its cybersecurity enforcement actions.

Given the growing cybersecurity market, we think the shares of solutions providers in this space, NortonLifeLock Inc. (NLOK – Get Rating), McAfee Corp. (MCFE – Get Rating), and Redwares Ltd. (RDWR – Get Rating), could be solid bets now. These stocks are rated ‘Strong Buy’ or ‘Buy’ in our proprietary POWR Ratings system.

Click here to checkout our Cybersecurity Industry Report for 2021

NortonLifeLock Inc. (NLOK – Get Rating)

NLOK in Mountain View, Calif., is a worldwide provider of cybersecurity solutions. The company’s offerings include Norton 360, a subscription service that protects devices against online threats, and the Norton Secure VPN, which provides online privacy through an encrypted data tunnel.

On October 5, NLOK unveiled its new privacy offering called Norton™ AntiTrack, an app and web extension that provides users with online privacy. The latest offering might expand NLOK’s privacy portfolio beyond traditional VPN.

In August, the company reached an agreement regarding merger with digital security and privacy products provider, Avast. Regarding the impending merger, Vincent Pilette, Chief Executive Officer of NortonLifeLock, said, “With this combination, we can strengthen our Cyber Safety platform and make it available to more than 500 million users. We will also have the ability to accelerate innovation further to transform Cyber Safety.”

For its first fiscal quarter, ended July 2, NLOK’s non-GAAP revenues increased 12.5% year-over-year to $691 million. Its non-GAAP operating income rose 22.5% from the prior-year quarter to $354 million, while its non-GAAP net income improved 31.9% from the same period last year to $248 million. Its non-GAAP net income per share came in at $0.42, up 35.5% from its year-ago value.

A $ 1.71 consensus EPS estimate for the current year (fiscal 2022) indicates an 18.8% year-over-year increase. Likewise, the $2.80 billion consensus revenue estimate for the current year reflects a 9.8% rise from the prior year. Moreover, NLOK has an impressive surprise earnings history; it has topped consensus EPS estimates in each of the trailing four quarters.

The stock has gained 28% in price over the past year and 28.3% year-to-date to close Friday’s trading session at $26.67.

NLOK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

NLOK has a Quality grade of A, and a Value grade of B. In the 27-stock Software – Security industry, it is ranked #4. To see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for NLOK, click here.

McAfee Corp. (MCFE – Get Rating)

MCFE is an integrated security, privacy, and trust solutions global provider. The Santa Clara, Calif., company’s anti-malware software, comprehensive internet security, and online privacy enable home users to protect their devices from various online threats.

On September 21, MCFE launched a new online protection service to provide personalized and unified experiences focused on…

 

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