Our digital world runs on computer tech, and that tech is only going to become more autonomous and more ubiquitous. And that, in turn, only underscores the ongoing importance of online security. With digital automation growing, it’s more important than ever, right now, to start firming up the digital protections.
Against this backdrop, Goldman Sachs’ Gabriela Borges has turned her eye on the cybersecurity sector. The analyst sees several industry dynamics that are favorable for long-term investors, including: “(1) Multi-product platforms have gained momentum and are closer to solving the challenge of staying innovative in subsegments historically defined by boom and bust product cycles. (2) The industry is less cyclical as mix shifts away from hardware and toward SaaS, and given consistent prioritization of security spend in enterprise budgets.”
Borges doesn’t leave us with a macro view of the industry. The analyst goes on to give a drill-down to the micro level, and picks out two cybersecurity stocks that she sees as potential winners for the long haul.
In fact, Borges is not the only one singing these stocks’ praises. According to the TipRanks platform, each boasts a “Strong Buy” consensus rating from the broader analyst community, and offers double-digit upside potential for the year ahead. Let’s take a closer look.
CrowdStrike Holdings (CRWD)
The first Goldman-pick we’ll look at is CrowdStrike, the producer of the high-end Falcon Endpoint Protection line, and a leader in the cybersecurity ecosystem. CrowdStrike’s products have set an industry standard for online network protection and for digital security, and include a range of cloud-based modules for a wide variety of applications. The company makes the products available by subscription through the Software-as-a-Service model.
The company reported some sound metrics in its last quarterly report, for Q3 of fiscal 2023. Revenue was up 53% year-over-year, at $581 million, and annual recurring revenue, at $2.34 billion, was up 54%. On the bottom line, CrowdStrike reported a fiscal Q3 earnings…