3 Underappreciated Cybersecurity Stocks to Buy Now
Underappreciated cybersecurity stocks practically sell themselves. Fundamentally, the backdrop for online nefarious activity will only exacerbate. So, why not acquire shares of enterprises that just happen to be bargains relative to key financial metrics?
It’s easy to find ideas that are priced at their intrinsic value or command a premium based on their business and/or market performance. However, the real gem is finding ideas that can still grow despite plying their trade in a burgeoning field. That might be the case with these enterprises, making them underappreciated cybersecurity stocks to buy.
Rapid7 (RPD)
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Based in Boston, Massachusetts, Rapid7 (NASDAQ:RPD) provides cybersecurity solutions under the brands Nexpos, Metasploit and its namesake label. Per its public profile, Rapid7 offers endpoint-to-cloud data collection and sharing applications. In particular, the company utilizes its proprietary platform to centralize and monitor data in cloud environments. It also analyzes end-to-end network traffic to help pinpoint threats.
While its peers often run hot multiples, RPD stock can be had for a relative discount. Right now, shares trade at a forward earnings multiple of 17.69X. That’s lower than the sector median of 24.3X. It appears to be a sensible offering given that analysts anticipate the company’s earnings per share to land at $2.19 by fiscal year’s end. If so, that would imply a reversal of last year’s loss of $2.46 per share.
On the top line, sales could hit $841.86 million, up 8.25% from last year’s haul of $777.71 million. Further, the most optimistic target calls for EPS of $2.50 on sales of $882.4 million. With digital threats constantly rising, RPD ranks among the underappreciated cybersecurity stocks to buy.
Gen Digital (GEN)
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Headquartered in Tempe, Arizona, Gen Digital (NASDAQ:GEN) engages in the provision of cyber safety solutions for consumers in the U.S., Canada, Latin America, Europe and other regions. It was founded in 1982 so it knows a thing or two. While the Gen Digital name might not be recognized immediately, the company operates under its popular labels Norton, Avast, Avira, AVG and CCleaner.
Despite Gen’s relevance, it’s one of the most underappreciated cybersecurity stocks to buy. Presently, the company runs a forward earnings multiple of only 10.62X. Again, that’s well below the sector median of 24.3X. However, this statistic seems a bit harsh. By the end of the year, analysts anticipate EPS to hit $2.22. That’s a massive leap forward from last year’s earnings of 96 cents per share.
Also, it’s worth pointing that 2024 may see revenue expand by nearly 4% to reach $3.95 billion. While this growth rate may not be impressive, in the past five years, the upward trajectory has been 9.4%. So, it’s quite possible that Gen Digital is underrated.
Tenable (TENB)
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Hailing from Columbia, Maryland, Tenable (NASDAQ:TENB) provides cyber exposure solutions for clients in the Americas, Europe and other regions. Per its corporate profile, Tenable offers multiple platforms, including its namesake Vulnerability Management solution. This is a cloud-delivered software that provides organizations with a risk-based view of traditional and modern attack surfaces.
Although the company offers myriad relevancies, the market hasn’t exactly been supportive of TENB stock. However, on the positive side, that makes shares undervalued. In particular, TENB trades at a price/earnings-to-growth (PEG) ratio of 1.21X. In contrast, the sector median stands at 1.61X. However, this dip against a key metric probably won’t last too long.
By year’s end, analysts believe EPS will hit $1.12. That would be a big turnaround from last year’s result of a loss of 68 cents per share. On the top line, revenue could clock in at $922.72 million, up 15.53% from the 2023’s haul of $798.71 million.
For fiscal 2025,EPS could rise 22.14% to reach $1.37 while revenue might breach the $1 billion mark, $1.05 billion to be exact. With so much potential, TENB ranks among the underappreciated 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.
