Promising investment picks in cybersecurity sector

The?cybersecurity sector?holds immense growth potential as our digital world continues to expand. What are the best investment picks in cybersecurity sector? We share our insights and ideas. https://www.ki-wealth.com/what-are-the-best-investment-picks-in-cybersecurity-sector/

Cybersecurity Sector Addressable Market

Market Opportunity:

• The digital economy’s growth is accompanied by an increase in digital crime. Cyberattacks are on the rise, leading to data breaches that threaten individuals and businesses.
• By 2025, damage from cyberattacks is projected to reach approximately?$10.5 trillion annually, a significant increase from 2015 levels.
• In 2021, organizations worldwide spent around?$150 billion?on cybersecurity, growing at a rate of?12.4% annually.

Addressable Market:

• The gap between the current vended market (approximately $150 billion) and the fully addressable market is substantial.
• According to the latest McKinsey Research Report, with only about?10% penetration?of security solutions today, the total opportunity amounts to a staggering?$1.5 trillion to $2.0 trillion.
• While reaching such a size may take time, this massive delta calls for innovation in the cybersecurity industry.

Areas of Focus:

• Cloud Technologies: As organizations adopt cloud services, cybersecurity solutions must adapt to secure cloud environments effectively.
• Pricing Mechanisms: Providers need flexible pricing models to cater to diverse customer needs.
• Artificial Intelligence: AI-driven security solutions can enhance threat detection and response.
• Managed Services: The midmarket segment, in particular, seeks managed security services.

In summary, the cybersecurity market is poised for substantial growth, and providers who address evolving needs and challenges can tap into the?$2 trillion pie. Below we highlight our top investment picks to help you to capitalize on incredible growth potential in cybersecurity sector.

Investment Picks in Cybersecurity Sector

Palo Alto Networks (PANW):

• Headquarters: Santa Clara, California
• Annual Revenue: $7.52 billion (FY2023)
• Known for strong next-generation firewalls (NGFW), endpoint detection and response (EDR), network security tools, zero trust, extended detection and response (XDR), IoT security, software-defined wide area network (SD-WAN), and secure access service edge (SASE).

?Palo Alto Networks (PANW)?is a leading cybersecurity company. Our estimated fair price for PANW stays at $336 per share, implying attractive 21% upside potential. Below we highlight PANW’s major strengths that contribute to its success:

Comprehensive Product Portfolio:

• PANW offers a broad range of security products, including next-generation firewalls (NGFW), endpoint detection and response (EDR), network security tools, zero trust solutions, extended detection and response (XDR), IoT security, software-defined wide area network (SD-WAN), and secure access service edge (SASE).
• Its diverse portfolio allows organizations to address multiple security needs from a single provider.

Strong Market Position:

• PANW has established itself as a key player in the cybersecurity industry.
• The company consistently receives top scores in rigorous independent security tests, demonstrating the effectiveness of its solutions.

Customer Base:

• PANW primarily targets enterprise-level customers, including large corporations, government agencies, and educational institutions.
• It also serves small and medium-sized enterprises (SMEs), catering to a wide range of organizations.

Innovation and Research:

• PANW actively contributes to the cybersecurity community through initiatives like hosting the Ignite cybersecurity conference and partnering with the World Economic Forum.
• Its commitment to research and development keeps it at the forefront of emerging security trends.

Loyal Customer Relationships:

• The company maintains strong relationships with its customers through various channels, including sales, marketing, customer support, and ongoing product development.

Security Expertise:

• PANW boasts a team of cybersecurity experts who continuously enhance its proprietary technology.
• Its partnerships with other technology companies further strengthen its offerings.

According to our current PANW stock forecast, the value of Palo Alto Networks shares will rise by 0.19% and reach?$ 267.07 per share by April 13, 2024. Per our technical indicators, the current sentiment is Bearish.

CrowdStrike (CRWD):

CrowdStrike?is a leading provider of?cloud-native security solutions?that safeguard endpoints, cloud workloads, identities, and data. Since its inception in?2012, CrowdStrike has been at the forefront of cybersecurity technology. Below we highlight the main competitive strengths of the company:

Unified Platform:

• CrowdStrike offers a?unified platform approach?to modern security. With just one agent, you get?complete protection?across various domains, including endpoint security, cloud security, and identity protection.

Industry Recognition:

• Gartner Magic Quadrant: CrowdStrike has consistently been recognized as a?Leader?in the?Endpoint Protection Platforms?category by Gartner.

Customer Recognition:

• More than?23,000 customers?rely on CrowdStrike to protect their critical assets.?Notable customers include?Intel Corporation?and?Target.

Business Value:

• According to an?IDC study, customers save?$6 for every $1 invested?in CrowdStrike, with a?5-month payback period.
• The unified platform streamlines security operations, making it easier to protect and build your future.

Threat Intelligence and Response:

• CrowdStrike provides?threat intelligence?and rapid?cyberattack response services?to help organizations stay ahead of threats.

In summary, CrowdStrike’s mission is to?stop breaches?and?drive business?by delivering industry-leading security solutions.

The forecasted CrowdStrike price at the end of 2024 is $396. Current valuation of the company looks a bit stretched, especially on P/E ratio. According to our estimates CRWD’s fair price in 2025 should reach $515, thus implying impressive long-term upside potential.

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