Cybersecurity stocks rose Friday following strong earnings from Okta Inc. and Palo Alto Networks Inc., adding to solid gains over the past year following the disclosure of a massive data breach at Equifax Inc.
On Friday, big gains in shares of identity management services company Okta Inc. OKTA, +19.05% and threat detection and prevention company Palo Alto Networks Inc. PANW, +3.65% drove a rise in exchange-traded funds that track the industry.
The ETFMG Prime Cyber Security ETF HACK, +0.85% rose 0.8%, while the First Trust NASDAQ Cybersecurity ETF CIBR, +0.25% gained 0.3%, compared with a 0.3% decline in S&P 500 index SPX, -0.07% and a 0.1% slip in the tech-heavy Nasdaq Composite COMP, +0.00%
Okta shares surged Friday to an all-time high of $75 and were last up 19% at $71.35 after the company reported better-than-expected quarterly results late Thursday.
Seven of the 13 analysts who cover Okta hiked their price targets, resulting in an average $72.36 price target for the stock, according to FactSet data. Of the analysts who cover Okta, 11 have buy or overweight ratings and two have hold ratings.
Okta’s most bullish analyst, J.P. Morgan’s Sterling Auty, raised his price target to a Street high of $88 from a previous $63.
“The stock is expensive, and has been for some time,” Auty said in a note. “Based on the quarterly performance the company keeps putting up it appears it is worth every penny.”
Auty noted that billings at Okta grew nearly 53% on the quarter to $109.4 million, ahead of his above-consensius estimate of $100.3 million, and that the company added a record 450 customers during the quarter..
Palo Alto shares rallied Friday to an all-time high of $234.45, and were last up 4.1% at $229.30 after earnings beat Wall Street estimates late Thursday and 21 out of the 38 analysts who cover the stock hiked their price targets, resulting in an average price target of $247.91, according to FactSet data.
Of the analysts who cover Palo Alto, 28 have buy or overweight ratings, eight have hold ratings and two have sell or underweight ratings. J.P. Morgan’s Auty also took the honors of having Wall Street’s most bullish price target on Palo Alto Networks at $282, up from his previous $239.
Jefferies analyst John DiFucci, who has a buy rating on Palo Alto and hiked his price target to $267 from $239, said that he believes the company is “well positioned as a true security platform play that is providing consolidated solutions the way enterprise customers would prefer to buy them.”
“New business metrics were strong for the fourth quarter, including 20% growth in New Workload Products Sales (excluding our estimate of refresh sales), and strong growth in New Subscription ACV (Annual Contract Value) and New Product ACV of 44% and 29%, respectively,” DiFucci said.
Of note, shares of cloud-based cybersecurity company Zscaler Inc. ZS, +9.46% rallied 10% on Friday following strong results late Wednesday.
On the whole, Friday’s gains add to an already strong year for cybersecurity stocks after Equifax EFX, -0.04% disclosed on Sept. 7, 2017 a massive hack of its databases.
Read: A year after Equifax, cybersecurity is still seeking its Holy Grail
Over the past 12 months, the ETFMG Prime Cyber Security ETF has gained 35%, while the First Trust NASDAQ Cybersecurity ETF has risen 32%, compared with a 16% advance in the S&P 500 and a 24% rise in the Nasdaq.
Over that time, some of the biggest gainers in the cybersecurity space have been shares of Everbridge Inc. EVBG, -0.63% with a 172% surge, Okta with a 164% rally, Fortinet Inc. FTNT, +0.58% with a 130% gain, Varonis Systems Inc. VRNS, +1.01% with a 92% rise, Qualys Inc. QLYS, +1.56% and CyberArk Software Ltd. CYBR, +0.61% both with an 86% advance, and Splunk Inc. SPLK, +1.77% with an 83% gain.
Read: Still have questions about Equifax one year later? We have the answers
Among the worst performing stocks over the past 12 months are Symantec Corp. SYMC, +0.13% with a 35% drop, FireEye Inc. FEYE, +1.51% with a 1.5% decline, Juniper Networks Inc. JNPR, -0.54% with a gain of 2.1%, Check Point Software Technologies Ltd. CHKP, -0.04% with a 3.7% rise, and Imperva Inc. IMPV, +0.11% with a 3.8% gain.
