Top Cybersecurity Stocks for Q4 2022

ATEN is top for value and growth while QLYS is top for momentum

Cybersecurity companies provide services to protect electronic information from theft or damage. Businesses in the cybersecurity industry utilize both software and hardware to ensure that computing devices and data are not misused. The industry serves a broad array of customers including individuals, businesses, and government, among others. Some of the leading names in cybersecurity include Check Point Software Technologies Ltd. and NortonLifeLock Inc.

Cybersecurity stocks, represented by the First Trust Nasdaq Cybersecurity ETF (CIBR), have underperformed the broader market over the past year. CIBR has provided a total return of -17.7% over the past 12 months, below the Russell 1000's total return of -12.5%. These market performance figures and all statistics in the tables below are as of Sept. 19, 2022.

Here are the top three cybersecurity stocks with the best value, the fastest growth, and the most momentum. Note that the companies on our list are primarily pure-play cybersecurity companies, while CIBR includes a wider variety of related stocks in its portfolio.

Best Value Cybersecurity Stocks

These are the cybersecurity stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Cybersecurity Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
A10 Networks Inc. (ATEN) 12.89 1.0 10.1
NortonLifeLock Inc. (NLOK) 21.32 14.2 14.9
CACI International Inc. (CACI) 280.14 6.6 18.1

Source: YCharts

  • A10 Networks Inc.: A10 Networks is a provider of secure applications and solutions for multi-cloud networks, including private and public clouds as well as on-premise environments. Its software and hardware solutions enable its customers to secure their applications, users, and infrastructure from Internet, web, and network threats. A10 Networks reported earnings results for Q2 2022 on Aug. 2. Net income climbed by 57.4% year-over-year (YOY) on solid revenue growth, driven by a substantial increase in Americas revenue.
  • NortonLifeLock Inc.: NortonLifeLock is a consumer cybersecurity company. It provides protective services and products for devices, online privacy, identity, home networks, and more. On Sept. 12, the company completed its acquisition of Avast, the digital security and privacy company. The aggregate consideration for the deal was over 94 million new NortonLifeLock Shares and roughly $6.0 billion in cash.
  • CACI International Inc.: CACI International is a holding company that, through subsidiaries, offers national security mission services. The company provides government support in both domestic and international matters and in surveillance, intelligence, communications, reconnaissance, and other areas.

Fastest Growing Cybersecurity Stocks

These are the top cybersecurity stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Cybersecurity Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
A10 Networks Inc. (ATEN) 12.89 1.0 62.5 14.9
Fortinet Inc. (FTNT) 50.74 40.0 31.3 28.6
Booz Allen Hamilton Holding Corp. (BAH) 96.04 12.7 53.7 13.1

Source: YCharts

  • A10 Networks Inc.: See company description above.
  • Fortinet Inc.: Fortinet is a cybersecurity and network services company. It serves enterprises, communication service providers, small businesses, and government organizations. The company reported Q2 2022 earnings on Aug. 3. Net income attributable to the company climbed 26.2% on rising revenue YOY. The company saw strong growth in both product and service revenue over the period.
  • Booz Allen Hamilton Holding Corp.: Booz Allen Hamilton is a holding company that provides management and technology consulting services through subsidiaries. It serves the U.S. government in the areas of defense, intelligence, and civil markets. Booz Allen Hamilton's Q1 FY 2023 ended June 30, and the company reported results for that period on July 29. Net income climbed by 49.9% as revenue grew by a smaller margin YOY. The company said it saw strong revenue growth and margins across all markets.

Cybersecurity Stocks With the Most Momentum

These are the cybersecurity stocks that had the highest total return over the past 12 months.

Cybersecurity Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Qualys Inc. (QLYS) 152.16 5.8 27.5
Booz Allen Hamilton Holding Corp. (BAH) 96.04 12.7 22.5
Science Applications International Corp. (SAIC) 94.14 5.2 13.4
Russell 1000 N/A N/A -12.5
First Trust Nasdaq Cybersecurity ETF (CIBR) N/A N/A -17.7

Source: YCharts

  • Qualys Inc.: Qualys is a compliance management and information technology security company. Its products are used to manage vulnerability, scan web applications, detect malware, and provide other services to customers in the U.S.
  • Booz Allen Hamilton Holding Corp.: See company description above.
  • Science Applications International Corp.: Science Applications International is a science and technology consulting company. It offers security and other consulting services and serves the energy, environmental, infrastructure, and health markets. On Sept. 7, the company announced that it had been awarded a $200 million task order by the U.S. Department of Defense. Under the contract, SAIC will provide training and recommend readiness procedures to improve intelligence and security to specific DOD operations.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. YCharts. "Financial Data."

  2. A10 Networks Inc. "A10 Networks Reports 14.9% Organic Growth for Q2 2022, Driven by Growth in Proprietary Security-Led Solutions."

  3. NortonLifeLock Inc. "NortonLifeLock Completes Merger with Avast."

  4. Fortinet Inc. "Fortinet Reports Second Quarter 2022 Financial Results."

  5. Booz Allen Hamilton Holding Corp. "BOOZ ALLEN HAMILTON ANNOUNCES FIRST QUARTER FISCAL 2023 RESULTS," Page 1.

  6. Science Applications International Corp. "SAIC Awarded $200M Task Order to Provide Training and Support to the U.S. Army Forces Command."

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