We recently compiled a list of the 12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where A10 Networks, Inc. (NYSE:ATEN) stands against the other undervalued cybersecurity stocks.
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.
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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.
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).
A computer network engineer operating a control panel with a view of a server room in the background.
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.
Overall ATEN ranks 9th on our list of the most undervalued cybersecurity stocks to buy according to hedge funds. While we acknowledge the potential of ATEN 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 ATEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.