Schaeffer's 43rd Anniversary Stock Picks in 2024

Why Bulls Shouldn't Sleep on These 3 Cybersecurity Stocks

Why Cyberark Software Ltd (NASDAQ:CYBR), Fortinet Inc (NASDAQ:FTNT), and Palo Alto Networks Inc (NYSE:PANW) may be on the brink of even more upside

Jun 22, 2015 at 12:08 PM
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Cybersecurity stocks have been marching higher in 2015, and there's a reason why -- businesses keep falling victim to hackers. This morning, in fact, Polish airline LOT said 1,400 passengers were grounded over the weekend following a cyber attack. More disconcerting yet, CEO Sebastian Mikosz said the problem extends throughout the industry, and thinks "it can happen to anyone anytime." In light of this news, we decided to take a closer look at three cybersecurity stocks poised to extend their record-setting runs: Cyberark Software Ltd (NASDAQ:CYBR), Fortinet Inc (NASDAQ:FTNT), and Palo Alto Networks Inc (NYSE:PANW).

  • CYBR has advanced nearly 80% this year to trade at $71.22, and late last week topped out at an all-time best of $76.35. While the shares are down 2.7% today -- following the lead of FireEye Inc (NASDAQ:FEYE) -- they remain perched solidly above their supportive 10-week moving average. However, the brokerage bunch has yet to fully appreciate Cyberark Software Ltd's technical tenacity, as five of eight consider the stock a "hold" or worse. Plus, the equity's consensus 12-month price target of $60.80 stands at a discount to current trading levels. In other words, the stars may be aligned for a potential round of bullish analyst attention.

  • FTNT has surged more than 42% year-to-date to trade at $43.62, and is 1.1% higher at midday, following a price-target hike to $49 from $43 at UBS. What's more, the stock hit a record high of $44.12 last Thursday, and has outperformed the S&P 500 Index (SPX) by almost 25 percentage points over the last three months. Regardless, one-third of analysts tracking Fortinet Inc maintain tepid "hold" ratings, and the equity's current price outstrips the average 12-month price target of $42.80. Long story short, the stage may be set for future upgrades and/or upward price-target revisions.

  • PANW jumped to an all-time peak of $185, after UBS bumped its price target to $206 from $180, but has since slipped -- currently 0.9% lower at $182.38. However, the shares have still more than doubled in value year-over-year. While the brokerage bunch is largely bullish toward Palo Alto Networks Inc, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open puts over calls at a faster-than-usual rate in recent months. Specifically, the stock's 50-day put/call volume ratio of 1.09 outranks nearly three-quarters of all comparable readings from the past year. An unwinding of this pessimism could add fuel to PANW's fire.

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