Cybersecurity Industry In 2021: The Complete Investors Guide

Many new IPOs come at steep valuations. Therefore, MCFE’s Value grade of B is unexpected. However, MCFE is an exception to the rule as it sports a PE of 13.8. This is remarkably cheaper than the S&P 500’s PE of 40. In addition to these categories, MCFE is also evaluated based on Momentum, Stability, Sentiment, Quality, and Industry. If you want to learn more about MCFE, click here.

Radware Ltd. (RDWR)

RDWR was founded in 1996 and is headquartered in Tel Aviv, Israel. It designs and develops cybersecurity applications for physical, virtual, and cloud environments. Its products include DefensePro, real-time network protection and attack prevention software, AppWall, which is a Web application firewall, and DefenseFlow, which is a cyber-command and control application. 

Further, RDWR provides Cloud DDoS Protection Service, which offers a range of enterprise-grade DDoS protection services in the cloud, as well as technical support, management and training, and certification services to its customers. The company sells to independent distributors, including value-added resellers, original equipment manufacturers, and system integrators. 

RDWR’s stock is quite attractive as it’s expected to grow earnings 27% next year, which is significantly above the market average and its peers. It is also priced much more attractively than its peers given its PS of 4.6. It also has an attractive 82% gross margin. RDWR’s long-term chart shows a stock that has been consolidating between $20 and $30 over the last four years. Due to the stock’s strong earnings momentum, reasonable valuation, and sector strength, there are good chances of a breakout. At the least, it presents an attractive risk-reward proposition.

RDWR is rated a B by the POWR Ratings which equates to a Buy rating. RDWR also has a B for Growth. This isn’t surprising considering that earnings per share (EPS) over the last 12 months was $0.20, and analysts are expecting EPS of $0.87 over the next year. 

RDWR also has an A for Quality. The company has been around since 1996 and has developed a reputation for creating effective cybersecurity solutions since its inception, including network security, cloud security, and enterprise software. If you want to learn more about RDWR, click here.

Qualys Inc. (QLYS)

Since the beginning of February, QLYS has been down by 30%. One factor is that many high-growth tech stocks have sold off due to rising interest rates. Another reason is the company issued guidance that was slightly below expectations. However, investors should consider using this weakness as an opportunity to add shares. QLYS is the leading company in the vulnerability management space. This service is essential for companies, as it helps them to prioritize where they should invest their time and resources in terms of cybersecurity. 

It’s also attractive from a valuation perspective, with a 34 forward PE. This is cheaper than the S&P 500, while the company is also growing earnings at a faster rate of 22%. It also has gross margins of 78%. 

QLYS is rated a B by the POWR Ratings, which equates to a Buy rating. QLYS also has a B for Industry grade. This makes sense given that the cybersecurity sector is expected to grow at a double-digit rate over the next decade. QLYS also has a B for Momentum. Last month, QLYS made a new, all-time high, however, the stock pulled back, which may be setting up a buying opportunity for investors who believe in the company’s long-term potential.  

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