File this one under “unintended consequences:” Barclays recently started up a preview of cybersecurity stocks and, in so doing, offered up a look at Fortinet (NASDAQ:FTNT) that suggested it didn’t have a lot of room for growth right now. Not only did that send Fortinet down over 2.5% at one point in Friday morning’s trading, but it also hit Check Point (NASDAQ:CHKP) fractionally, CyberArk Software (NASDAQ:CYBR) just over 1%, and Tyler Technologies (NYSE:TYL) just over 2%. The only one who came out unscathed—and up—was Varonis Systems (NASDAQ:VRNS), up just over 2%.
Barclays downgraded Fortinet from Overweight to Equal Weight, noting that the risk-reward prospect at Fortinet was pretty much evenly balanced. Barclays went into channel checks and discovered a little more downside potential than they’d have liked to have seen. Further, talks with investment officials note that refreshing the firewall is kind of a lower priority than normal right now. Thus, Barclays dropped Fortinet’s estimate of third-quarter billing to its lower end.
Meanwhile, this weighed on much of the rest of the field. Barclays’ model of Check Point, for example, saw a dip in billings growth of around 3%. Tyler Technologies faced trouble with comparisons, as COVID-19-related revenue and some big bookings from last year made this year look sluggish. However, Cyberark Software got positive nods on “sustainably positive margins” and improvements to annual revenue figures. As for Varonis, it got an upgrade thanks to rising interest in software-as-a-service (SaaS) deployments and other catalysts ahead of 2024.
Which Cybersecurity Stocks are a Good Buy Right Now?
Turning to Wall Street, Check Point, a Moderate Buy, is offering the lowest upside potential out of the stocks covered herein. CHKP stock offers 3.79% upside potential on its average price target of $139.50. Meanwhile, FTNT stock, still a Strong Buy despite Barclays’ downgrade, offers investors 34.28% upside potential thanks to its average price target of $75.91.
