The need for stronger cybersecurity actions cannot be ignored in a world that is undergoing a rapid digital transformation amid cyberattacks and breaches that just don’t seem to stop.
In its recent 2022 Security Report, Cybersecurity firm Check Point (CHKP) revealed that weekly cyberattacks in 2021 were 50% more compared to 2020. The report also highlighted that in 2021 around 60% of small and medium businesses in the United States shut down their operations within six months of their systems being attacked.
So far this year, tech bellwethers such as Microsoft (MSFT), Nvidia (NVDA), Okta (OKTA) and Samsung have fallen prey to data breaches.
Meanwhile, growing cyber threats to national security is another major concern that is making governments across the world, especially the West, jittery.
Towards the end of March, the U.S. President, Joe Biden, warned of potential cyberattacks of significant scale from Russia. Biden had advised companies to up the ante in taking stronger cybersecurity measures.
However, it is not that simple. Firstly, the growing sophistication of technology is also simultaneously giving rise to increasingly sophisticated cybercrimes.
Secondly, the cybersecurity sector is plagued with a dearth of talent, which is slowing the pace of organisations that have the potential to stay ahead of the curve in their combat against cybercrime.
Nonetheless, we bring to you two industry leaders that have upped the ante in bridging the gap between manpower shortage and growing demand for sophisticated cybersecurity tools.
Palo Alto (NASDAQ: PANW)
With a market capitalization of $58 billion, Palo Alto Networks is one of the largest dedicated IT security firms listed on the U.S. market.
Apart from providing cybersecurity tools, including firewalls, the company runs a program that provides world-class cybersecurity training across the globe.
Further, the company has solid cash reserves to pursue strategic acquisitions and keep investing in educational programs. In the last reported quarter, Palo Alto’s cash and cash equivalents stood at $1.9 billion, with no long-term debts to weigh down its books.
Moreover, given its strong financial standing and outlook, the company looks attractive from an investor’s spectacle as well.
Last week, Oppenheimer analyst Ittai Kidron reiterated a Buy rating on the stock and raised the price target to $700 from $600.
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on PANW, as 8.7% of investors on TipRanks increased their exposure to the stock over the past 30 days.
Overall, the Street is also optimistic about the company and has a Strong Buy consensus rating based on 22 Buys and two Holds. Palo Alto’s average price target of $657.75 implies 11.7% upside potential.
Fortinet (NASDAQ: FTNT)
With a market cap of almost $50 billion, Fortinet specializes in network security and provides Unified Threat Management solutions to private and government enterprises and entities.
Last week, Fortinet’s Security Awareness and Training program hit the shelves, taking the company a step ahead in addressing the talent shortage issue.
The program will help companies to strengthen their security framework by expanding their employees’ cybersecurity skillsets and enhancing their knowledge.
Fortinet, too, has a strong balance sheet with ample cash reserves. This not only allows it to invest in technical skill development programs but also makes it an attractive stock for investors.
Earlier this week, buoyed by robust demand, Citigroup analyst Fatima Boolani reiterated a Buy rating on Fortinet with a price target of $405.
Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on eight Buys, eight Holds, and one Sell. FTNT’s average price target of $351.88 implies 14% upside potential.
Conclusion
Both Palo Alto and Fortinet are known and trusted players in their domain. The companies seem to be strongly positioned for the future. Further, their efforts in building and upscaling talent are in line with the industry’s growth.
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