Cybersecurity Stocks Q2 In Review: Rapid7 (NASDAQ:RPD) Vs Peers

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Rapid7 (NASDAQ:RPD) and the rest of the cybersecurity stocks fared in Q2.

Cybersecurity continues to be one of the fastest-growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud-based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location.

The 9 cybersecurity stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

In light of this news, cybersecurity stocks have held steady with share prices up 3% on average since the latest earnings results.

Rapid7 (NASDAQ:RPD)

Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.

Rapid7 reported revenues of $208 million, up 9.2% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with accelerating customer growth and full-year revenue guidance exceeding analysts’ expectations.

“Rapid7 delivered solid second quarter results in line with our expectations, growing ARR by 9% year-over-year to $816 million, and continuing to innovate to bring customers the strongest security operations data platform,” said Corey Thomas, Chairman and CEO of Rapid7.

Interestingly, the stock is up 20.4% since reporting and currently trades at $39.80.

Is now the time to buy Rapid7? Access our full analysis of the earnings results here, it’s free.

Best Q2: Varonis (NASDAQ:VRNS)

Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.

Varonis reported revenues of $130.3 million, up 12.9% year on year, outperforming analysts’ expectations by 4.4%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and full-year revenue guidance exceeding analysts’ expectations.

The market seems happy with the results as the stock is up 20.3% since reporting. It currently trades at $58.28.

Is now the time to buy Varonis? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Qualys (NASDAQ:QLYS)

Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ:QLYS) provides organizations with software to assess their exposure to cyber-attacks.

Qualys reported revenues of $148.7 million, up 8.4% year on year, in line with analysts’ expectations. It was a softer quarter as it posted underwhelming revenue guidance for the next quarter and a miss of analysts’ billings estimates.

Qualys delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 10.2% since the results and currently trades at $123.27.

Read our full analysis of Qualys’s results here.

SentinelOne (NYSE:S)

With roots in the Israeli cyber intelligence community, SentinelOne (NYSE:S) provides software to help organizations efficiently detect, prevent, and investigate cyber attacks.

SentinelOne reported revenues of $198.9 million, up 33.1% year on year. This result was in line with analysts’ expectations. Aside from that, it was a satisfactory quarter as it also recorded full-year revenue guidance exceeding analysts’ expectations but a miss of analysts’ billings estimates.

SentinelOne pulled off the fastest revenue growth among its peers. The company added 40 enterprise customers paying more than $100,000 annually to reach a total of 1,233. The stock is up 6.7% since reporting and currently trades at $26.41.

Read our full, actionable report on SentinelOne here, it’s free.

Palo Alto Networks (NASDAQ:PANW)

Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.

Palo Alto Networks reported revenues of $2.19 billion, up 12.1% year on year. This print topped analysts’ expectations by 1.2%. Overall, it was a strong quarter as revenue and EPS topped analysts’ expectations.

The stock is up 8.9% since reporting and currently trades at $373.57.

Read our full, actionable report on Palo Alto Networks here, it’s free.

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