Â
Stocks in cybersecurity have been fairly strong performers over the past few years, signaling a bull trend that serious investors mustn’t ignore. Cyber attacks are growing increasingly more common, so of course, cybersecurity startups are launching to compensate.
Though not all stocks are promising, several companies could show a positive earning potential.
Cybersecurity Statistics
The recent jumps in cybersecurity stocks have obviously responded to an array of attacks that have rocked the nation. Hackers are getting smarter about inserting malicious code and gaining access to private information.
Businesses have been compelled to take steps like encrypting their email and securing their private servers to monitor and prevent each assault on a constant basis. The statistics with regard to cybersecurity for both small and large businesses can be shocking.
About 32 percent of companies reported having been victimized by a cyber crime in 2016, and hackers often remained uncaught. By 2021, spending in the cybersecurity market -- both to prevent strikes and to repair the damage -- is expected to exceed $1 trillion.
Major Security Breaches Increase Cybersecurity Industry
Although cybersecurity programs have been around since the dawn of the Internet, general awareness of the problem grew substantially after the Target scandal of 2013, when more than 70 million credit card numbers were stolen through an online hacking. The security lapses were startling, and businesses that promised to fight the threat cropped up all over the place shortly thereafter.
Since that time, we’ve seen data breaches worth billions at Yahoo, eBay, JP Morgan Chase, Anthem, Home Depot, Adobe, and many smaller firms, which have resulted in lost revenue and millions of angry customers. Recovery from breaches like that is not easy or inexpensive, whether for major businesses or small operations.
One of the biggest cybersecurity breaches of this decade occurred just a few months ago and involved the credit firm Equifax. Executives admitted they were aware of the security flaw in their portal a full two months before the breach actually occurred, but they didn’t fix it in time.
Hackers obtained an excessive amount of personal data, including names, addresses, emails, Social Security numbers, birth dates, and even driver’s license numbers.
Equifax executives acknowledged that an organization of that size had no valid excuse for failing to patch its security flaw sooner. Given the rising number of security vulnerabilities without good solutions to protect them, however, it’s not often feasible to make suitable repairs in time.
Stocks Grow in Popularity
Although the loss of personal information and money for these companies and their customers is anything but happy, there is a brighter side to all this chaos. Stocks in cybersecurity wouldn’t be growing nearly as quickly if it weren’t for the massive demand.
Now is a perfect time to invest in cybersecurity stocks while the market is still relatively new. Not all cybersecurity stocks would make a good investment, though.
It’s worthwhile to watch company trends and try to grasp the basis for a good cybersecurity investment, the way you would any other stock. Cybersecurity may pose even greater risks, perhaps, because the market is evolving constantly.
You want to look at forward-thinking investments and not get stuck with a system that won’t evolve with the times. According to predictions, these are the stocks that market observers predict will perform the best in the coming years.
FireEye, Inc.: This specialty security provider focuses on enterprises and governments with the most advanced security products and services. Equifax’s recent security breach will supposedly be a huge booster for FireEye, Inc., since their services promise to meet Equifax’s needs. The firm recently moved to a subscription-based cloud service platform, which will generate lower revenues at first, but in time will mean more stable returns. It’s a lower-risk investment in a constantly evolving market.
Barracuda Networks: Over the last year, Barracuda’s stocks have risen more than 14.5 percent, largely thanks to its hybrid cloud solutions that give it a competitive edge against older but more established organizations. Thanks to the recent Equifax data breach, experts are expecting a 40 percent jump in the coming months.
Palo Alto Networks, Inc.: This next-gen security platform offers firmer security measures to prevent attacks in both private enterprises and government agencies. The infrastructure is incredibly simple, which has increased the general appeal of this company’s services. Palo Alto also recently partnered with the likes of VMware and Aruba Networks, which will certainly increase growth and foster a more stable investment.
Symantec Corporation: In the wake of Equifax’s breach, it should be no surprise that this identify-theft protection service will likely be in high demand in the near future. Just in the next month, experts predict a 3.4 percent rise in shares. Symantec has also acquired a few useful companies recently, such as LifeLock, which promise stable partnerships and a strong investment platform.
Right now, while the burn of the Equifax breach is still hot, investors can pay a pretty penny on cybersecurity stocks. Do some careful research, and study the stocks that will rise thanks to their intuitive and forward-thinking changes.
Stability is the most vital feature to look for in cybersecurity investment. You’ll be grateful for your due diligence when your stocks multiply over the coming months.
Disclosure: I do not own any of the stocks mentioned in this article.
