2 Super Cybersecurity Stocks (Other Than CrowdStrike) to Buy Hand Over Fist Today

According to research firm McKinsey, the corporate sector is poised to spend $213 billion on cybersecurity software in 2024. However, that isn’t nearly enough to defend against what Cybersecurity Ventures believes will be $9.5 trillion worth of damage caused by cybercrime throughout the year.

McKinsey believes companies should be collectively spending $2 trillion each year instead, which leaves a gap of $1.8 trillion. That spells opportunity for cybersecurity vendors, because the sheer cost of cyberattacks will push an increasing number of businesses to invest more heavily in protection.

CrowdStrike (CRWD 2.69%) is the second-largest cybersecurity vendor in the world, with a market capitalization of $91 billion. However, it’s growing its revenue twice as fast as the current leader, Palo Alto Networks, and could soon snatch first place considering its stock skyrocketed 147% in the past year alone.

However, it will take more than one or two vendors to fill the enormous spending gap highlighted by McKinsey. Therefore, here’s why investors might want to consider buying shares in SentinelOne (S -1.19%) and Tenable (TENB 2.14%) as well.

1. SentinelOne: A powerhouse in automated protection

SentinelOne believes machines can react to cyber incidents much faster than humans, so its Singularity platform is built with artificial intelligence (AI)-based automation at its core. It’s a complete cybersecurity solution covering cloud networks, endpoints, and identity protection, with a host of unique features designed to save human employees time.

Singularity’s Storyline feature, for example, autonomously creates incident summaries complete with context, so managers don’t have to spend hours conducting manual investigations. Its One-Click Remediation tool then allows managers to instantly roll back unauthorized changes to their organization’s network in the event of a successful breach. Finally, Purple AI is a chatbot-style assistant integrated into Singularity that can uncover vulnerabilities and hunt for new threats on command.

During the recent fiscal 2025 first quarter (ended April 30), SentinelOne generated $186 million in revenue, a 40% year-over-year jump. That meant it grew even faster than CrowdStrike, which delivered a revenue increase of 33% during the same period — but CrowdStrike generated significantly more revenue ($921 million), which makes it harder to grow as quickly. Nevertheless, it’s a sign SentinelOne might be taking some market share from its competitors.

SentinelOne also generated $33.7 million in free cash flow during Q1, which is a non-GAAP measure of profitability. The combination of solid revenue growth and operating costs that only increased by 5.3% from the year-ago period were contributing factors to the result. SentinelOne never delivered positive free cash flow before Q1, so it was an important milestone.

SentinelOne stock is down 77% from its all-time high, which was set during the 2021 tech frenzy. It was trading at a price-to-sales (P/S) ratio of more than 100 then, which was unsustainable, but it’s now at a more reasonable 8.2. In fact, that looks like a bargain compared to CrowdStrike’s P/S ratio of 28.1, especially considering SentinelOne’s revenue is growing at a faster clip.

2. Tenable: A leader in vulnerability management

Tenable is a specialist in the vulnerability management segment. Its Nessus platform is the most deployed solution of its kind in the industry. It proactively scans devices, networks, and operating systems in search of vulnerabilities so organizations can patch them before they are exploited by bad actors.

However, Nessus has become more of an on-ramp into the broader Tenable ecosystem, which includes a growing number of mainstream cybersecurity products like cloud security and identity management. In fact, the company launched Tenable One in 2022, which is a consolidated solution designed to meet all of the cybersecurity needs of modern organizations.

Tenable One also includes a product called ExposureAI, which helps managers assess their risk posture, explains potential threats, and even recommends actions to improve outcomes. Tenable says it has the world’s largest repository of contextual exposure data, and since data is the lifeblood of AI models, ExposureAI is positioned to be one of the most effective tools of its kind.

Tenable generated $216 million in revenue during the first quarter of 2024 (ended March 31), which was a 14% increase from the year-ago period. It’s growing relatively slowly because it’s pulling back on its costs to focus on profitability instead, in order to build a more sustainable business for the long term. Its operating expenses increased by just 8% during Q1, resulting in a 42% reduction in its GAAP net loss, which came in at only $14.4 million.

On a non-GAAP basis, which strips out one-off and non-cash expenses like stock-based compensation, Tenable’s net income soared 133% to $30.4 million, so its strategy is certainly paying off.

Tenable stock is even cheaper than SentinelOne, with a P/S ratio of just 5.8. The company is growing its revenue at a slower pace than SentinelOne, but it’s very close to achieving true GAAP profitability, which probably makes it a good buy for value investors with a more conservative risk profile. If McKinsey’s forecasts for the cybersecurity industry prove to be accurate, Tenable will play a key role in filling the spending gap.