Society's continuous path towards an interconnected digital environment has come farther from just science fiction. Advances in tech like cloud & quantum computing, AI, and driverless cars are no longer themes we'd read from novels but a reality that steadily draws near. However, it can be challenging as risk is always around the corner, from hacking to intellectual property theft. This emphasizes the importance of any company or even any individual needing cybersecurity. 

Cybersecurity helps defend computers and other devices from cyber attacks and secures everyone's crucial data from would-be attackers. Cyber attacks have cost companies billions of dollars worth of data. This presents an excellent opportunity to take advantage of an industry expected to grow to $298.5 billion by 2028, and we expect some of these stocks to double in value by then. Let’s explore three cybersecurity stocks showing signs of growth alongside the market and beat analyst expectations.

Fortinet, Inc. (FTNT)

When it comes to cybersecurity, Fortinet, Inc. is one of the global leaders in this space. The company works with organizations, enterprises, governments, security service providers, and small businesses by providing platform products that secure their devices' networks and even counter threats in real-time. The company has been paving the way to enhance customer security with its new comprehensive, secure networking solution integrated with Wi-Fi 7, the FortiAP 441K. FTNT recently announced a new compact 5G dual modem, FortiGate Rugged 70G, built to withstand even the harshest environments.

FTNT just released its Q4'23 and FY'23 financials. Total revenue came in at $1.42 billion for the quarter, representing a 10.3% increase YoY. and rose 20% to $5.30 billion for the whole year. The company attributes this to solid billings, net income growth, and operating margins. In fact, the company has beaten analyst expectations again by 13.51%. Fortinet’s strategy to focus on Secure Networking resulted in growth in its Security Operations and SASE billings and strong guidance for Q1 2024 and FY 2024. Its prospects and strong foothold in the market make it one of the high-growth cybersecurity stocks investors should watch out for. 

DLH Holdings Corp. (DLHC)

One of the emerging leaders in cybersecurity and digital transformation is DLH Holdings Corp, a company that provides cybersecurity solutions, systems engineering & integration, and science research & development to federal agencies. The company collaborates with the Departments of Health and Human Services and Defense to advance defense and health efforts inside the federal government. While its operations span numerous industries, it has a robust cybersecurity portfolio through its Infinibyte Cloud and Cyber Security Ecosystem. 

DLH Holdings' recent financial results showcased strong growth. Revenue in Q1'24 hit $97.9 million vs $72.7 million in the year-ago quarter and was attributed mainly to its strategic acquisitions. While there are ongoing challenges from slower bidding opportunities, DLHC is optimistic about its future growth as its contract backlog is $653.5 million as of December 31, 2023. 

In addition, DLHC is proactive with its debt reduction and commitment to lower its debt levels by the end of fiscal 2024, highlighted by its $5 million in voluntary prepayments for the quarter. Bottom line: DLHC’s innovative solutions, resilient business model, bipartisan support for government contracts, and robust platform make it one of our top-growing cybersecurity stocks to buy.

Tenable Holdings, Inc. (TENB) 

The developer of the proprietary vulnerability scanner, Nessus, Tenable Holdings, Inc., is a cybersecurity firm specializing in exposure management solutions that help companies gain visibility on their vulnerability and security issues. Its solutions include Tenable.io, which is a cloud-delivered software-as-a-service (SaaS) platform that offers a risk-based view of traditional and modern attack surface; Tenable.io Web Application Scanning for its vulnerability scan for web applications; Tenable.cs, which provides cloud security teams the tools to protect their multi-cloud environments. TENB has recently been recognized as a cloud security leader by Snowflake, emphasizing its strong foothold in the cybersecurity market.

The company’s latest financials boast strong double-digit growth in its financial metrics for the fourth quarter and full-year 2023. Fourth-quarter revenue grew 16% YoY to $213.3 million, and full-year revenue grew by 17% to $798.7 million. Calculated billings for the fourth quarter also jumped 14% YoY to $271.6 million, and full-year calculated current billings reached $873.3 million. 

TENB also demonstrated its strong ability to attract new clients with its 597 new enterprise platform customers alongside 156 net new six-figure for its last quarter. Looking ahead, the company projects revenue to be in the range of $895.0 million to $905.0 million, highlighting another year of potential growth. With its double-digit performance, growth momentum, and strong appeal to new customers, TENB is set for a strong 2024.

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On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.