The tech-heavy Nasdaq Composite is off 4.6% in the past three months while the broader technology ETF XLK has lost 1.3% and ETFMG Prime Cyber Security ETFMG Prime Cyber Security Fund HACK has retreated 0.7%. While rising rates have dealt a blow to the tech ETFs this year, we expect the pain over the space to lessen in 2023 as the Fed is likely to slow the rate hike pace.
Among the many corners in the tech space, we expect one area – cybersecurity – to emerge winner in the group. The latest earnings picture gives the cues.
Earnings in Detail
Earnings reports from CrowdStrike CRWD and SentinelOne S pleasantly surprised Wall Street lately. CrowdStrike Holdings reported third-quarter fiscal 2023 non-GAAP earnings of 40 cents per share, beating the Zacks Consensus Estimate of 32 cents. CrowdStrike’s fiscal third-quarter revenues of $580.9 million surged 53% year over year and surpassed the consensus mark of $574.7 million.
SentinelOne came out with a quarterly loss of $0.16 per share versus the Zacks Consensus Estimate of a loss of $0.22. The company posted revenues of $115.32 million for the quarter ended October 2022, surpassing the Zacks Consensus Estimate by 3.93%. Both companies that are targeted at offering protection to many devices attached to corporate networks, raised their guidance too.
Okta Inc. OKTA reported breakeven earnings in third-quarter fiscal 2023, beating the Zacks Consensus Estimate by 100%. Total revenues increased 37.2% year over year to $481 million and surpassed the consensus mark by 3.76%.
Splunk Inc. SPLK reported solid third-quarter fiscal 2023 results (ended Oct 31, 2022), beating both the bottom-line and top-line estimates driven by healthy demand trends. Non-GAAP income in the reported quarter was 83 cents per share, which beat the Zacks Consensus Estimate by 60 cents. Total revenues in third-quarter fiscal 2023 improved to $929.8 million, beating the consensus estimate of $846 million.
In mid-November, Palo Alto Networks PANW reported non-GAAP earnings of 83 cents per share, beating the Zacks Consensus Estimate of 68 cents. Palo Alto’s fiscal first-quarter revenues of $1.56 billion surpassed the Zacks Consensus Estimate of $1.55 billion. PANW is up 19.5% past month.
In mid-November,Cisco Systems CSCO reported first-quarter fiscal 2023 non-GAAP earnings of 86 cents per share, which beat the Zacks Consensus Estimate by 2.38%. Revenues increased 5.7% year over year to $13.63 billion and beat the consensus mark by 2.32%.
Across the security landscape, vendors are busy providing tools to big companies concerned about susceptibilities that have arisen due to the remote work and hybrid concept and an increase in cyber-attacks due to Russia-Ukraine war, per CNBC.
Against this backdrop, below we highlight a few cybersecurity ETFs that should be tracked for gains in the coming days.
ETFs in Focus
ETFMG Prime Cyber Security ETFMG Prime Cyber Security Fund HACK – Up 7.3% Past Month
WisdomTree Cybersecurity Fund WCBR – Up 7.1% Past Month
First Trust NASDAQ Cybersecurity ETF CIBR – Up 6.7% Past Month
iShares Cybersecurity & Tech ETF IHAK – Up 5.5% Past Month
Global X Cybersecurity ETF BUG – Up 5.4% Past Month
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
SentinelOne, Inc. (S) : Free Stock Analysis Report
Splunk Inc. (SPLK) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
ETFMG Prime Cyber Security ETF (HACK): ETF Research Reports
First Trust NASDAQ Cybersecurity ETF (CIBR): ETF Research Reports
Okta, Inc. (OKTA) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
iShares Cybersecurity and Tech ETF (IHAK): ETF Research Reports
Global X Cybersecurity ETF (BUG): ETF Research Reports
WisdomTree Cybersecurity Fund (WCBR): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
