In this article, we discuss 5 cybersecurity stocks under $20. If you want to see more stocks in this selection, check out 10 Cybersecurity Stocks Under $20.
5. Cerberus Cyber Sentinel Corporation (NASDAQ:CISO)
Number of Hedge Fund Holders: N/A
Share Price as of October 3: $2.95
Cerberus Cyber Sentinel Corporation (NASDAQ:CISO) was founded in 2015 and is headquartered in Scottsdale, Arizona. It operates as a cybersecurity services company in the United States, providing managed security, cybersecurity consulting, compliance auditing, vulnerability assessment, penetration testing, disaster recovery, and data backup solutions. It is one of the best cybersecurity stocks under $20.
On September 6, Cerberus Cyber Sentinel announced that it has concluded the acquisition of NLT Secure, a cybersecurity company headquartered in Chile, with U.S. offices in Tampa, Florida. NLT Secure offers a broad range of security solutions and managed services to organizations throughout South America.
4. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 17
Share Price as of October 3: $4.70
Next on our list of cybersecurity stocks under $20 is BlackBerry Limited (NYSE:BB), a Canadian firm providing intelligent security software and services to companies and governments worldwide. BlackBerry Limited (NYSE:BB) operates through three segments – Cybersecurity, IoT, and Licensing and Other. In Q2 2022, BlackBerry Limited (NYSE:BB)’s cybersecurity billings increased 15% sequentially to $102 million and grew 6% year-over-year during the first half of the fiscal year.
On September 28, Canaccord analyst T. Michael Walkley reiterated a Hold rating on BlackBerry Limited (NYSE:BB) but lowered the price target on the shares to $5 from $6. The analyst said while management has created a compelling long-term strategy and multiple parts of the business display improving growth trends, there needs to be more proof of execution before he revises his estimates and becomes more constructive on the shares.
According to Insider Monkey’s Q2 data, BlackBerry Limited (NYSE:BB) was part of 17 hedge fund portfolios, compared to 20 in the prior quarter. Prem Watsa’s Fairfax Financial Holdings is the largest stakeholder of the company, with 46.7 million shares worth about $252 million.
3. SolarWinds Corporation (NYSE:SWI)
Number of Hedge Fund Holders: 19
Share Price as of October 3: $7.75
SolarWinds Corporation (NYSE:SWI) is a Texas-based company that designs software for enterprises to help manage their networks, systems, and information technology infrastructure. On August 3, Truist analyst Terry Tillman reaffirmed a Hold rating on SolarWinds Corporation (NYSE:SWI) and lowered the price target on the shares to $10 from $15. The company’s Q2 results were robust and it is seeing good traction within its subscription products, with subscription revenue up 25% year-over-year, though his trimmed price target reflects slightly lower revenue and EBITDA estimates, the analyst told investors in a research note. SolarWinds Corporation (NYSE:SWI) is one of the best cybersecurity stocks under $20.
According to the second quarter database of Insider Monkey, 19 hedge funds held stakes worth $670 million in SolarWinds Corporation (NYSE:SWI), compared to 17 funds in the prior quarter worth $906 million. Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners is the leading stakeholder of the company, with 61.5 million shares worth $630 million.
2. A10 Networks, Inc. (NYSE:ATEN)
Number of Hedge Fund Holders: 22
Share Price as of October 3: $13.27
A10 Networks, Inc. (NYSE:ATEN) is a California-based company that provides networking solutions in the Americas, Japan, the rest of Asia Pacific, and EMEA countries. The company offers intelligent management, secure application delivery in multi-cloud environments, firewalls, and encryption services.
The company is positioned to benefit from multiple growth trends, such as elevated internet traffic, cloud migration, cybersecurity threats, 5G, and more. In its Q2 earnings disclosure, A10 Networks, Inc. (NYSE:ATEN) reiterated its full-year targets of top-line growth of 10-12% and EBITDA growth in the range of 26-28% of revenue.
According to Insider Monkey’s data, 22 hedge funds held stakes in A10 Networks, Inc. (NYSE:ATEN) worth $106 million at the end of June, compared to 24 funds in the last quarter worth $135 million. Jim Simons’ Renaissance Technologies is the biggest stakeholder of the company, with roughly 3 million shares valued at $42.5 million.
1. NortonLifeLock Inc. (NASDAQ:NLOK)
Number of Hedge Fund Holders: 43
Share Price as of October 3: $20.14
NortonLifeLock Inc. (NASDAQ:NLOK) is an Arizona-based company that delivers extensive cybersecurity solutions for customers in the United States, Canada, Latin America, Europe, the Middle East, Africa, the Asia Pacific, and Japan. NortonLifeLock Inc. (NASDAQ:NLOK)’s $8.6 billion purchase of Avast Plc is expected to create a revenue synergy opportunity of $850 million for NortonLifeLock Inc. (NASDAQ:NLOK). The projected gross margins will increase to 85.8% with the cost synergies and operating margins will climb to 43.7% in 2022 and 49.5% in 2023. It is one of the best cybersecurity stocks to invest in.
According to Insider Monkey’s data, 43 hedge funds were bullish on NortonLifeLock Inc. (NASDAQ:NLOK) at the end of the second quarter of 2022, compared to 42 funds in the first quarter. Jeffrey Smith’s Starboard Value LP is the leading position holder in the company, with 19.20 million shares worth $421.73 million.
Here is what ClearBridge Investments All Cap Value Strategy has to say about NortonLifeLock Inc. (NASDAQ:NLOK) in its Q4 2021 investor letter:
“However, not every example has a cyclical dynamic. Consumer cybersecurity company NortonLifeLock undoubtedly benefited from the COVID-19 pandemic lockdowns as sales of personal computers and time spent online skyrocketed, as did subscriptions to the company’s security products. The market has lumped Norton into the “COVID winners” bucket and embedded a substantial reduction in subscriptions going forward as the company laps its strong results from the depths of the pandemic. While these concerns are reasonable for many within the COVID winner cohort, it is not the case for Norton. Company-specific improvements in marketing and product development have been just as powerful tailwinds to subscriber growth and would have continued to carry the company’s growth through the most difficult comparisons from 2020 even without the pandemic effect. The market’s concern about tailwinds turning to headwinds is overwrought, and contrary to the decline currently embedded in the stock price, we are confident that Norton’s earnings will continue to compound. Similar to EQT and OneMain, NortonLifeLock has been actively putting its ample cash flow generation to work to crystalize upside for shareholders. In addition to strong dividends and share repurchase activity, last year Norton announced the acquisition of “freemium” competitor Avast. Already attractive from a pricing standpoint, the acquisition creates the potential to generate immense cost and revenue synergies as well as providing Norton a strong foothold outside the North American market and a broader customer acquisition funnel. Once the transaction closes in 2022, Norton will have growing free cash flow generation of $1.5 billion and a clear path to an EPS of $5, yet a resulting valuation of just 5x earnings power. Given the high-single-digit revenue growth that Avast brings to the table, we believe the continuation of a valuation this depressed for Norton is highly unlikely.”
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