In this article, we will discuss the 12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds.
With businesses facing a significantly complex cyber threat landscape, it is of utmost importance to stay ahead of trends in cybersecurity. Industry experts believe that, in 2025, the integration of AI in threat detection and acceleration in post-quantum encryption should define the landscape of the broader cybersecurity industry. Splashtop reported that the transition to a Zero-Trust framework demonstrates a significant shift in cybersecurity, emphasizing continuous verification and minimal access to enhance overall network security.
Global X Cybersecurity ETF saw an increase of more than 20% over the past year. What has led to this rally? Given the recent adoption of AI technology, market experts believe that the need for cybersecurity is significantly important. With several companies integrating GenAI into their operations, there has been a significant increase in cyberattacks. This led to increased demand for product offerings of cybersecurity companies.
Cybersecurity Industry- The Road Ahead
As per Fortune Business Insights, the global cybersecurity market size was pegged at US$172.24 billion in 2023. This market should grow from USD 193.73 billion in 2024 to USD 562.72 billion by 2032, demonstrating a CAGR of 14.3%. Furthermore, the US cyber security market should see strong growth, touching an estimated value of US$166.73 billion in 2032. This should stem from an increased number of e-commerce platforms. The strong adoption of enterprise security solutions in manufacturing, BFSI, and healthcare should fuel market growth up to 2032.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Prevention of Cyberattacks
As per EIN Presswire, the quicker expansion of the Internet of Things (IoT) offers a significant opportunity for the broader cybersecurity market. As IoT devices—which range from smart home appliances to industrial sensors— become critical to business operations, there seems to be an increased requirement for effective cybersecurity measures. Several devices often lack strong security protocols. This leads to hacking, unauthorized access, and exploitation.
EIN Presswire added that, amidst these challenges, the cybersecurity industry has a unique opportunity to develop specialized solutions established to secure the IoT ecosystem effectively. This might consist of implementing advanced encryption protocols to protect data transmission, and developing device authentication mechanisms so that only authorized devices can connect to the network. Also, intrusion detection systems can be deployed tailored to monitor and protect against threats related to interconnected devices.
NGFWs (Next Generation Firewalls) protect against evolving practices that use AI to bypass traditional defences, as per Juniper Research. It added that the network layer is the most critical element of IoT networks to protect, with more than 45% of global cybersecurity spending inclined towards protecting the network layer in 2025.
Amidst these trends, we will now look at the 12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds
An engineer typing on a computer, developing the latest cybersecurity application.
Our Methodology
To list the 12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds, we sifted through numerous online rankings and combed through cybersecurity-focused ETFs, such as First Trust NASDAQ Cybersecurity ETF and Amplify Cybersecurity ETF. After getting an initial list of 25-30 stocks, we extracted the ones trading lower than the forward P/E of ~20.0x, as of November 20. Finally, the stocks were ranked in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds
12) Arqit Quantum Inc. (NASDAQ:ARQQ)
Forward P/E as of November 20: ~18.7x
Number of Hedge Fund Holders: 2
Arqit Quantum Inc. (NASDAQ:ARQQ) is a cybersecurity firm, which uses quantum encryption technology to create and distribute symmetric encryption keys while safeguarding data from cyber threats.
With quantum computers becoming more widespread, Arqit Quantum Inc. (NASDAQ:ARQQ)’s technology for securely creating and distributing encryption keys is expected to revolutionize the industry. Arqit Quantum Inc. (NASDAQ:ARQQ) and SoftIron announced a partnership to enable customers to go for a seamless migration to quantum-safe cloud tasks, with a priority focus on the defense sector.
SoftIron integrated Arqit’s Symmetic Key Agreement Platform (SKA-Platform™) into HyperCloud, which is SoftIron’s ready-to-run true private cloud experience, deployed on-premises or on the battlefield. Wall Street believes that the technology demonstrates a complementary offering and both companies will leverage their existing industry partnerships and defense customers.
As per industry experts, Arqit Quantum Inc. (NASDAQ:ARQQ)’s encryption product remains fully secure against future quantum attacks and does not impact network performance. Amidst the increasing awareness of quantum threats, Arqit Quantum Inc. (NASDAQ:ARQQ)’s strategies in securing new contracts and implementing cost-saving measures should fuel its long-term growth.
Wall Street analysts gave a price target of $51 on the shares of Arqit Quantum Inc. (NASDAQ:ARQQ).
11) Open Text Corporation (NASDAQ:OTEX)
Forward P/E as of November 20: ~7.8x
Number of Hedge Fund Holders: 17
Open Text Corporation (NASDAQ:OTEX) offers intranet, extranet, and corporate portal solutions to organizations. OpenText Cybersecurity provides a range of security solutions, which include prevention, detection, response, investigation, compliance, and recovery.
Wall Street analysts are optimistic about Open Text Corporation (NASDAQ:OTEX)’s strategic partnership with Cork Inc., which will add cyber warranty solutions to offer a holistic solution portfolio tailored specifically for Small and Medium Businesses and Managed Service Providers.
Open Text Corporation (NASDAQ:OTEX)’s MSP/MSSP survey demonstrated that SMBs prioritize comprehensive cybersecurity, with 63% seeking outsourced solutions which include cyber warranty services. The OpenText-Cork partnership should be able to directly address this demand. It provides MSPs the ability to give Cork’s cyber warranty as an add-on service, resulting in developing new revenue opportunities.
Industry experts believe that Open Text Corporation (NASDAQ:OTEX) remains well-placed to achieve strong growth as a result of its purchase of Pillr, an MDR platform, from Novacoast, Inc. This acquisition ramps up Open Text Corporation (NASDAQ:OTEX)’s cybersecurity product roadmap to provide key features such as API integrations and product/pricing bundling for MSPs looking for a comprehensive solution to protect, detect, and respond to cybersecurity threats.
By continuous investment in acquisitions and partnerships, the company remains well-positioned to capitalize on the growing demand for cybersecurity solutions globally. Open Text Corporation (NASDAQ:OTEX)’s acquisition of Zix Corporation offers customers a powerhouse SMB platform for data protection, threat management, email security, and compliance solutions.
Collectively, these initiatives are expected to further strengthen Open Text Corporation (NASDAQ:OTEX)’s position in the cybersecurity market, fueling growth and enhancing its ability.
As per Wall Street, the shares of the company have an average price target of $34.17.
10) OneSpan Inc. (NASDAQ:OSPN)
Forward P/E as of November 20: ~12.8x
Number of Hedge Fund Holders: 18
OneSpan Inc. (NASDAQ:OSPN) offers software services. It is engaged in designing and developing security software and e-signature solutions that protect devices and financial transactions from fraud and misuse.
Wall Street analysts are optimistic about OneSpan Inc. (NASDAQ:OSPN)’s new solution, VISION FX. This new solution combines OneSpan’s patented CRONTO® transaction signing with FIDO2 protocols, strengthening the protection against phishing and account takeover threats (ATO). The changes in the banking sector related to new digital initiatives have resulted in unprecedented cybersecurity risks.
OneSpan Inc. (NASDAQ:OSPN) highlighted that digital fraud losses from attacks such as ATO are expected to exceed $343 billion globally between 2023 and 2027. Amidst this environment, banks of all sizes require sophisticated methods to protect accounts and transactions.
In Q3 2024, OneSpan Inc. (NASDAQ:OSPN)’s subscription revenue saw an increase of 29% YoY to $33.6 million. Industry experts believe that security subscription revenue is expected to surpass hardware revenue for the first time in 2024. Also, healthy demand for authentication and mobile application products should continue to aid its growth in subscription revenue for security solutions.
The company has made a strategic shift towards higher-margin software revenue and is focused on operational efficiency and profitability. These measures, together with OneSpan Inc. (NASDAQ:OSPN)’s emphasis on growing its partner ecosystem and expected growth in security subscription revenue, should place it well for efficient and profitable revenue growth.
9) A10 Networks, Inc. (NYSE:ATEN)
Forward P/E as of November 20: ~18.0x
Number of Hedge Fund Holders: 20
A10 Networks, Inc. (NYSE:ATEN) offers computer networking products and security solutions. It provides controllers, firewalls, protection systems, and other networking products.
Market experts believe that A10 Networks, Inc. (NYSE:ATEN)’s focus on diversification and security-led solutions is expected to continue to drive revenue growth in the near term. The company remains focused on expanding its security offerings and integrating AI capabilities. Furthermore, a cautious approach to capital deployment, together with a focus on strategic M&A opportunities and potential share buybacks, should aid A10 Networks, Inc. (NYSE:ATEN) in the upcoming quarters.
Security-led revenue accounted for 63% of total revenue in Q3 2024, exhibiting A10 Networks, Inc. (NYSE:ATEN)’s continued evolution to a cybersecurity-focused organization that leverages AI tools to benefit customers. The company has also aligned its cost structure to enable consistent profitability despite macro uncertainty. It also remains focused on delivering increased operating leverage. From the security-led business, A10 Networks, Inc. (NYSE:ATEN) expects growth in the range of 10% – 12% moving forward.
Overall, the company remains focused on adding new AI-based capabilities and harnessing machine learning to better identify and mitigate threats.
BWS Financial upped its price target on the shares of A10 Networks, Inc. (NYSE:ATEN) from $17.00 to $24.00, giving a “Buy” rating on 13th November.
8) NetScout Systems, Inc. (NASDAQ:NTCT)
Forward P/E as of November 20: ~10.8x
Number of Hedge Fund Holders: 21
NetScout Systems, Inc. (NASDAQ:NTCT) is a prominent comprehensive operational intelligence solutions provider. The company focuses on cybersecurity, network management, and service assurance for enterprises and service providers.
NetScout Systems, Inc. (NASDAQ:NTCT) is emphasizing its security offerings. This move aligns with the increasing demand for cybersecurity solutions throughout industries. By strengthening its position in the security market, the company targets tapping into new revenue streams and boosting its value proposition to customers.
NetScout Systems, Inc. (NASDAQ:NTCT) announced updates to its advanced, scalable deep packet inspection-based Omnis Cyber Intelligence Network Detection and Response (NDR) platform. New MITRE ATT&CK behavioral analytics allow earlier detection of advanced threats such as ransomware, suspicious traffic, or unauthorized access attempts. It also supports improving remediation to help meet industry and country compliance requirements.
The organizations are seeking effective and efficient methods to comply with industry or government regulations, like the EU’s Digital Operational Resilience Act (DORA), which will be effective on January 17, 2025. Therefore, companies are learning that the network continues to play a strategic role in success. Omnis Cyber Intelligence’s continuous, scalable deep packet inspection-based network monitoring, tighter alignment with ATT&CK, expanded behavioral analytics, and new open architecture for ecosystem integration support the companies in meeting these important compliance requirements.
As per Wall Street, by leveraging the existing customer relationships and technology expertise, NetScout Systems, Inc. (NASDAQ:NTCT) can place itself as a trusted provider of integrated service assurance and security solutions. This should result in increased cross-selling opportunities, higher-value contracts, and improved profit margins.
Insider Monkey’s Q3 2024 database revealed that NetScout Systems, Inc. (NASDAQ:NTCT) was in the portfolio of 21 hedge funds.
7) Science Applications International Corporation (NASDAQ:SAIC)
Forward P/E as of November 20: ~13.4x
Number of Hedge Fund Holders: 25
Science Applications International Corporation (NASDAQ:SAIC) offers technical, engineering, and enterprise information technology (IT) services mainly in the US. The company also provides digital engineering, cybersecurity, and cloud computing, among other solutions.
Xage Security and Science Applications International Corporation (NASDAQ:SAIC) announced a strategic relationship to bring zero-trust security solutions to critical infrastructure and distributed edge, which includes operational technology, IT, and cloud environments.
In a bid to address the increasing demand from the Federal sector to secure distributed edge and cyber-physical environments, Xage Security Gov continues to work with Science Applications International Corporation (NASDAQ:SAIC) to address these needs. This collaboration is expected to accelerate Zero Trust adoption across the public sector.
Furthermore, during Q2 2025, Science Applications International Corporation (NASDAQ:SAIC) was awarded a 5-year (one-year base, plus four, one-year option periods), $206 million recompete to deliver high-quality IT services which are critical to the seamless execution of the Veterans Affairs Financial Services Center’s operations. As per the industry veterans, this effort is expected to support the Financial Services Center in Austin, TX with essential services like infrastructure and application support, cloud services, cybersecurity, and data analytics, among other services.
These developments further strengthen the Science Applications International Corporation (NASDAQ:SAIC)’s position as a leader in addressing the cybersecurity challenges witnessed by government entities and critical infrastructure providers. Heartland Advisors, an investment management company, released its Q2 2024 investor letter. Here is what the fund said:
“We see a similar opportunity in Science Applications International Corporation (NASDAQ:SAIC), which offers a range of IT services to its customers.
SAIC has faced recent challenges with lower-than-average government contract renewals and lower demand for their IT services, prompting the appointment of new management to address business development concerns. We purchased shares of SAIC in the second quarter on the premise that the new management team, led by a CEO previously with Microsoft, will be able to succeed in two key self-help efforts: increasing the volume of SAIC bids and improving the firm’s below-average industry “recompete rates,” which consist of rebidding on previously awarded expiring government contracts that are typically 5 years in length.
These efforts, coupled with internally focused capital allocation strategies that include dividend growth and active share buybacks, are likely to drive price appreciation for the stock. In the meantime, SAIC shares trade at a modest 13 times forecast earnings with a strong 8% free cash flow/enterprise value yield. Additionally, SAIC’s newly appointed CEO and CFO purchased shares during the quarter — suggesting to us the management team is confident in future prospects at SAIC.”
6) Gen Digital Inc. (NASDAQ:GEN)
Forward P/E as of November 20: ~13.4x
Number of Hedge Fund Holders: 27
Gen Digital Inc. (NASDAQ:GEN) is engaged in providing consumer cybersecurity solutions. It offers solutions that enable consumers to protect their devices, online privacy, identity, and home networks.
Wall Street analysts are optimistic about Gen Digital Inc. (NASDAQ:GEN)’s growth potential, which stems from the favorable market environment and increased awareness of cybersecurity needs. Furthermore, a recent data breach at NPD increased consumer interest in identity protection services. This added momentum to the Gen Digital Inc. (NASDAQ:GEN)’s offerings.
In Q2 2024, the company expanded its customer base for the 5th consecutive quarter, rising to 39.7 million, up 389,000 sequentially and up more than 1.1 million YoY. This growth was mainly driven by international growth and increased demand for identity services.
Gen Digital Inc. (NASDAQ:GEN)’s successful cross-selling strategies, along with the development of NextGen’s product portfolio, should continue to contribute to its strong performance. Collaborating with banks, credit card companies, and other financial services providers is expected to allow Gen Digital Inc. (NASDAQ:GEN) to provide identity protection as a value-added service to a broader customer base. This might include real-time monitoring of financial transactions and credit reports.
Making investments in cutting-edge AI technologies should enhance the capabilities of Gen Digital Inc. (NASDAQ:GEN)’s identity protection services, improving threat detection and offering more personalized protection. This might set the company’s offerings apart in a competitive market.
As per Wall Street analysts, the shares of the company have an average price target of $31.83.
5) Akamai Technologies, Inc. (NASDAQ:AKAM)
Forward P/E as of November 20: ~13.4x
Number of Hedge Fund Holders: 30
Akamai Technologies, Inc. (NASDAQ:AKAM) is a cybersecurity and cloud computing company, which powers and protects business online.
Wall Street analysts are optimistic about Akamai Technologies, Inc. (NASDAQ:AKAM)’s acquisition of application programming interface (API) security company, Noname Security. This demonstrates its strategic focus on expanding its security and compute offerings. This acquisition aligns with Akamai Technologies, Inc. (NASDAQ:AKAM)’s goal of strengthening its security portfolio and capitalizing on the growing demand for API protection.
Noname should accelerate Akamai Technologies, Inc. (NASDAQ:AKAM)’s ability to address growing customer demand and market requirements as the use of APIs continues to expand. Furthermore, it will be able to extend protection throughout API traffic locations, irrespective of business, integration, or deployment requirements that the customers might have. Akamai Technologies, Inc. (NASDAQ:AKAM) will be able to gain greater scale with Noname’s additional sales and marketing resources, and well-established channel and alliance relationships.
Akamai Technologies, Inc. (NASDAQ:AKAM)’s previously announced acquisition of Guardicore enhanced Akamai’s Zero Trust security capabilities. Therefore, this acquisition positioned Akamai Technologies, Inc. (NASDAQ:AKAM) to address the evolving needs of enterprise customers amidst an increasingly distributed computing environment. Despite the near-term challenges, the company’s management remains optimistic about its long-term prospects, primarily in the Security and Compute segments. With the cybersecurity market expanding rapidly, Akamai Technologies, Inc. (NASDAQ:AKAM)’s established reputation and comprehensive security portfolio place it well to tap a significant share.
Tigress Financial reiterated a “Strong buy” rating, issuing a $140.00 target price on 29th August. Diamond Hill Capital, an investment management company, released its fourth-quarter 2023 investor letter. Here is what the fund said:
“Akamai Technologies, Inc. (NASDAQ:AKAM) is a legacy content delivery network (CDN) solutions provider which management has recently pivoted to enterprise and network security as well as distributed cloud computing. However, these markets are intensely competitive, and Akamai has yet to prove it can differentiate itself from cloud hyperscalers and best-of-breed security companies.”
4) F5, Inc. (NASDAQ:FFIV)
Forward P/E as of November 20: ~16.9x
Number of Hedge Fund Holders: 31
F5, Inc. (NASDAQ:FFIV) offers multi-cloud application security and delivery solutions in the US, Europe, the Middle East, Africa, and the Asia Pacific region. F5 security solutions protect apps and APIs against critical risks.
OVHcloud® US, a global cloud player, and a leading European cloud provider, announced collaboration with F5, Inc. (NASDAQ:FFIV). Because of this collaboration, OVHcloud customers will now have access to F5 Distributed Cloud Services. F5 Distributed Cloud Services are SaaS-based security, networking, and application management services. These services allow customers to deploy, secure, and operate applications in a cloud-native environment wherever needed i.e., data center, multi-cloud, or the network or enterprise edge.
OVHcloud customers can send traffic across F5’s private global network to offer integrated web applications and API protection where apps are deployed. With organizations accelerating their digital transformation journeys, the need for strong security and seamless connectivity throughout diverse cloud environments has become more important, as per F5, Inc. (NASDAQ:FFIV).
Industry experts remain optimistic about F5, Inc. (NASDAQ:FFIV)’s acquisition of Wib. The addition of Wib’s capabilities to F5, Inc. (NASDAQ:FFIV)’s Distributed Cloud Services should enable vulnerability detection and observability in application development processes. This will make sure that risks are identified and policies are implemented before APIs enter production.
In a shorter period, F5, Inc. (NASDAQ:FFIV) substantially reshaped itself from a hardware-centric, single-product company into a security and software leader. This transformation redefined the company’s role beyond the data center, increasing its value to customers, diversifying the revenue, and expanding its total addressable market.
As per Insider Monkey’s Q3 2024 data, F5, Inc. (NASDAQ:FFIV) was in the portfolios of 31 elite hedge funds.
3) Rapid7, Inc. (NASDAQ:RPD)
Forward P/E as of November 20: ~17.8x
Number of Hedge Fund Holders: 31
Rapid7, Inc. (NASDAQ:RPD) is a leading provider of security analytics and automation solutions.
Rapid7, Inc. (NASDAQ:RPD) has been proactive in enhancing its product offerings and refining the go-to-market (GTM) strategy. The launch of the Command Platform represents a significant addition to the company’s security analytics and automation capabilities. Also, Rapid7, Inc. (NASDAQ:RPD) has been successful in upselling to its existing customer base, offering a stable foundation for recurring revenue.
Coming to Rapid7, Inc. (NASDAQ:RPD)’s new Command Platform, it possesses the potential to address complex cybersecurity challenges witnessed by enterprises. The company’s AI-charged Command Platform enables the customers to integrate their critical security data to offer a unified view of vulnerabilities, exposures, and threats from endpoints to the cloud to close security gaps and prevent attacks.
The platform is expected to drive increased adoption among existing customers and onboard new clients seeking integrated security solutions. The Command Platform can allow the company to expand its addressable market. By providing a more comprehensive suite of tools, Rapid7, Inc. (NASDAQ:RPD) can increase its average revenue per customer and improve customer retention rates.
For Q4 2024, Rapid7, Inc. (NASDAQ:RPD) expects revenue in the range of $211 million- $213 million, demonstrating a YoY growth of 3%-4%. It expects non-GAAP net income per share of between $0.48-$0.51. Wasatch Global Investors, an asset management company, released its Q2 2024 investor letter. Here is what the fund said:
“As for our sells, we exited Rapid7, Inc. (NASDAQ:RPD), a cybersecurity company that provides real-time analytic services including vulnerability management and threat protection. We came to the conclusion that cybersecurity services will increasingly be bundled with other services and may no longer offer the competitive advantages and growth potential they once did.”
2) Check Point Software Technologies Ltd. (NASDAQ:CHKP)
Forward P/E as of November 20: ~17.6x
Number of Hedge Fund Holders: 32
Check Point Software Technologies Ltd. (NASDAQ:CHKP) is engaged in developing, designing, and marketing enterprise software. It provides threat prevention, web security, security management, and software-defined protection, among other services.
Check Point Software Technologies Ltd. (NASDAQ:CHKP) is cautiously optimistic about its growth trajectory, with an emphasis on network security, email security, and SASE solutions. Given its strong focus on product innovation and strategic acquisitions, Check Point Software Technologies Ltd. (NASDAQ:CHKP) appears to be well-placed to meet higher demand for cybersecurity solutions and maintain its growth momentum into the next fiscal year.
Experts believe that The Infinity platform offers a significant opportunity for Check Point Software Technologies Ltd. (NASDAQ:CHKP) to fuel growth and strengthen its market position. As a comprehensive security solution, Infinity addresses the increased demand for integrated, cloud-based security offerings that can protect organizations against multiple attack vectors. With more and more organizations embracing digital transformation, the demand for comprehensive security solutions, like Infinity, should grow.
The Infinity platform’s subscription-based model is expected to help Check Point Software Technologies Ltd. (NASDAQ:CHKP) pivot towards more predictable and recurring revenue streams. This can improve the company’s financial stability. When customers become deeply integrated with the Infinity ecosystem, there may be increased switching costs, which can improve customer retention.
Ariel Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“Israeli based provider of products for information technology security, Check Point Software Technologies Ltd. (NASDAQ:CHKP) also advanced following solid quarterly earnings results. Double-digit billings growth was particularly strong across geographies. Consumers appear to be adopting more pillars of Check Point’s platform and engaging in larger strategic commitments with Infinity and Quantum Force. The company also announced the appointment of new CEO Nadav Zafrir, whose reputation is well established in the cyber community. Meanwhile, Check Point continues to be an astute steward of capital, pursuing organic growth and utilizing surplus cash to return capital to shareholders. We continue to favor the company’s exposure to the fast-growing cloud security market and its industry leading profitability.”
1) Cisco Systems, Inc. (NASDAQ:CSCO)
Forward P/E as of November 20: ~15.8x
Number of Hedge Fund Holders: 60
Cisco Systems, Inc. (NASDAQ:CSCO) provides enterprise network security, software development, data collaboration, and other related services.
Cisco Systems, Inc. (NASDAQ:CSCO)’s focus on AI infrastructure and security seems to be paying off, with strong demand from webscale customers and a more than doubling of security orders, partly because of the integration of Splunk. Excluding Splunk, growth in security product orders was fueled by Cisco Systems, Inc. (NASDAQ:CSCO)’s renewed security strategy and new product pipeline.
The company continues to see momentum around its new security products like XDR, Secure Access, and Multicloud Defense with more than 1,000 customers deploying these products. Wall Street analysts remain optimistic about Cisco Systems, Inc. (NASDAQ:CSCO)’s acquisition of Spunk. This will enhance Cisco’s capabilities in data analytics and security and open up new revenue streams.
As cyber threats become more sophisticated, Cisco Systems, Inc. (NASDAQ:CSCO)’s integrated security solutions might see higher demand, fueling customer loyalty. The company’s platform-centric approach, primarily in security, should simplify customer experiences and drive increased sales. This strategy can result in improved customer retention and upselling opportunities, resulting in sustained profitability.
The London Company, an investment management company, released Q3 2024 investor letter. Here is what the fund said:
“Exited: Cisco Systems, Inc. (NASDAQ:CSCO) – Sale reflects slowing growth prospects and risk of value-destroying M&A. Valuation of the shares is attractive, and CSCO offers a 3.3% dividend yield at the current price, which makes it a more attractive holding for our Income Equity portfolio.”
While we acknowledge the potential of CSCO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than CSCO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
