Best cybersecurity stocks to invest in 2025

As cyberattacks become more sophisticated and frequent, organizations are prioritizing advanced digital defense systems, creating long-term opportunities for cybersecurity leaders. The most promising cybersecurity stocks combine innovation, scale, and a track record of effectively neutralizing threats across industries.

Palo Alto Networks continues to expand its dominance with an integrated platform that addresses everything from cloud security to zero-trust architectures for comprehensive enterprise protection. CyberArk leads the privileged access management space, securing organizations' most sensitive credentials and accounts through innovative identity security solutions and threat detection capabilities. Cloudflare excels at securing and optimizing internet infrastructure, providing comprehensive web security, DDoS protection, and performance optimization services across its global network.

These companies are not just defending digital infrastructure – they're shaping the future of how global enterprises secure their operations, protect sensitive data, and ensure business continuity in an increasingly interconnected world. For investors seeking exposure to high-growth technology segments that are becoming indispensable to modern society, these are among the best cybersecurity stocks to invest in 2025.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in stocks mentioned in this article.

Now, let`s take a closer look at each of the companies:

  • Palo Alto Networks (NYSE:PANW)

    Palo Alto Networks Inc is a global cybersecurity leader that provides next-generation firewall technology and comprehensive security solutions worldwide. Founded in 2005 by Nir Zuk and headquartered in Santa Clara, California, the company has redefined how organizations protect their digital assets. Palo Alto Networks helps businesses combat cyber threats with confidence through its innovative security platforms.

    The company specializes in network security, cloud security, and endpoint protection, offering a comprehensive platform that integrates artificial intelligence and automation for enhanced threat detection. Its products and services are widely adopted across industries, from finance to healthcare, enabling secure digital transformation and protecting critical business operations. With a commitment to innovation and a customer-centric approach, Palo Alto Networks continues to empower organizations to stay ahead of emerging cyber risks.

    Palo Alto Networks financial statements

    Analysts recommendation: 1.69

    Financial Health

    • Return on assets (ROA): 5.21%
    • Return on equity (ROE): 17.45%
    • Return on investment (ROI): 13.89%

    Profitability

    • Gross margin: 73.41%
    • Operating margin: 12.27%
    • Net profit margin: 12.3%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 1.6
    • EPS estimate (next quarter): 0.89
    • EPS growth (this year): 14.06%
    • EPS growth (next year): 13.18%
    • EPS growth (next 5 years): 13.5%
    • EPS growth (quarter-over-quarter): -29.17%
    • Sales growth (past 5 years): 22.03%
    • Sales growth (quarter-over-quarter): 15.84%

    💡 Why invest in Palo Alto Networks?

    Several key factors make Palo Alto Networks an attractive prospect for investors seeking exposure to the critical cybersecurity sector:

    • Next-Generation Firewall Leadership: Palo Alto Networks is a pioneer and continued leader in NGFW technology, offering a best-in-class solution for network security with advanced threat detection and prevention capabilities.
    • Holistic Security Platform: They provide a holistic cybersecurity platform that addresses various security needs, catering to a broader customer base with integrated solutions for network, cloud, and endpoint protection.
    • Innovation Technology Focus: Their commitment to integrating AI and ML into their platform positions them at the forefront of cybersecurity innovation with advanced threat intelligence and automated response capabilities.
    • Strong Market Demand: The ever-increasing reliance on technology and the growing threat landscape create a strong and consistent demand for robust cybersecurity solutions across all industries and sectors.

    🐌 Key considerations before investing in Palo Alto Networks

    While Palo Alto Networks` leadership in NGFWs, comprehensive platform, and focus on innovation are strengths, there are challenges to consider in the cybersecurity sector:

    • Cyberthreat Evolution Challenges: Cybercriminals are constantly developing new methods of attack, requiring Palo Alto Networks to keep pace with innovation in threat detection and prevention technologies continuously.
    • Cybersecurity Competition Pressure: The cybersecurity market is crowded with established players and emerging vendors, vying for market share through competitive pricing and innovative security solutions offerings globally.
    • Workforce Talent Shortage: A shortage of skilled cybersecurity professionals can limit Palo Alto Networks` ability to implement and support their solutions effectively across global markets and customer segments.
    • Security Incident Risks: Even the most robust security systems can be breached, and a major security incident involving a Palo Alto Networks product could damage their reputation and impact sales significantly.

    Final thoughts on Palo Alto Networks

    Palo Alto Networks` leadership in NGFW technology, comprehensive security platform, and focus on innovation paint a potentially promising picture for long-term investors seeking exposure to the essential cybersecurity sector. However, the evolving threat landscape, competition, workforce limitations, and the inherent risk of security breaches necessitate a cautious approach. Thorough research, analysis of Palo Alto Networks` approach to these challenges, and a clear understanding of your risk tolerance are crucial before adding this cybersecurity leader to your portfolio.

  • CyberArk (NYSE:CYBR)

    CyberArk is a global leader in identity security, specializing in protecting organizations from cyber threats by securing privileged accounts, credentials, and access. Headquartered in Petah Tikva, Israel, the company was founded in 1999 by Alon N. Cohen and Udi Mokady. Since its inception, CyberArk has played a pivotal role in advancing cybersecurity practices, helping businesses safeguard their most sensitive digital assets.

    The company`s core business focuses on providing solutions for privileged access management (PAM), identity governance, and endpoint security. CyberArk`s flagship offerings include tools to detect and mitigate risks associated with privileged accounts, as well as solutions for managing secrets in DevOps workflows. Trusted by enterprises and governments worldwide, CyberArk continues to empower organizations to strengthen their defenses against increasingly sophisticated cyberattacks while enabling secure digital transformation.

    CyberArk financial statements

    Analysts recommendation: 2.63

    Financial Health

    • Return on assets (ROA): -4.97%
    • Return on equity (ROE): -10.35%
    • Return on investment (ROI): -4.67%

    Profitability

    • Gross margin: 74.99%
    • Operating margin: -6.88%
    • Net profit margin: -13.78%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): -3.38
    • EPS estimate (next quarter): 0.92
    • EPS growth (this year): 28.12%
    • EPS growth (next year): 24.47%
    • EPS growth (next 5 years): 28.19%
    • EPS growth (quarter-over-quarter): -502.23%
    • Sales growth (past 5 years): 18.19%
    • Sales growth (quarter-over-quarter): 45.98%

    💡 Why invest in CyberArk?

    Several key factors make CyberArk Software an attractive prospect for investors seeking exposure to the critical cybersecurity sector:

    • Privileged Access Leadership: CyberArk is a recognized leader in the PAM market, offering best-in-class solutions for securing privileged accounts and credentials across enterprise environments with proven track record and market dominance.
    • Comprehensive Security Solutions: Their platform goes beyond password management, providing a holistic approach to privileged access security with integrated identity governance, endpoint protection, and threat detection capabilities.
    • Innovation Investment Focus: CyberArk actively invests in research and development, staying ahead of evolving cyber threats and expanding their PAM capabilities through continuous platform enhancements and emerging technology integration.
    • Growing Cybersecurity Demand: The ever-increasing reliance on technology and the escalating threat landscape drive consistent demand for robust cybersecurity solutions, creating sustained market opportunities for specialized providers.

    🐌 Key considerations before investing in CyberArk

    While CyberArk`s leadership in PAM, comprehensive platform, and focus on innovation are strengths, there are challenges to consider in the cybersecurity sector:

    • Cybersecurity Market Competition: The cybersecurity market is a crowded space with established players and emerging vendors vying for market share, creating pricing pressure and customer acquisition challenges for specialized providers.
    • PAM Solution Complexity: Implementing and maintaining a PAM solution can be complex, requiring skilled cybersecurity professionals and significant organizational change management to achieve successful deployment and adoption.
    • Threat Landscape Evolution: Cybercriminals are constantly developing new attack methods, requiring CyberArk to continuously update and improve their PAM platform to stay effective against sophisticated and evolving security threats.
    • Platform Security Risks: Since CyberArk safeguards highly sensitive privileged credentials, any security breach within their platform could have severe consequences for both the company and its enterprise customers worldwide.

    Final thoughts on CyberArk

    CyberArk`s leadership in privileged access management, comprehensive security platform, and innovation focus create compelling opportunities for investors seeking exposure to the essential cybersecurity sector. However, market competition, solution complexity, evolving threats, and platform security risks require careful evaluation of the company`s strategic positioning and execution capabilities. Investors should thoroughly research CyberArk`s competitive advantages and risk management approach before making investment decisions in this critical cybersecurity leader.

  • Cloudflare (NYSE:NET)

    Cloudflare, Inc. is a global web infrastructure and security company that enhances the performance, reliability, and safety of internet properties through its expansive content delivery network (CDN), DDoS protection, and security services. The company was founded in 2009 by Matthew Prince, Lee Holloway, and Michelle Zatlyn, and is headquartered in San Francisco, California. From its early days emerging from Project Honey Pot to launching at TechCrunch Disrupt in September 2010, Cloudflare has rapidly scaled its network infrastructure to over 330 data centers across 125+ countries, supporting nearly 20% of all websites globally.

    Cloudflare`s core business centers on delivering a comprehensive suite of cloud, security, and performance services to millions of websites and applications worldwide. Key offerings include its global CDN, robust DDoS mitigation, next-gen Web Application Firewall, domain name services, and edge computing via its Workers platform. The company is also investing in AI-powered tools such as bot detection, API protection, and content scraping defenses to stay ahead in the evolving cybersecurity landscape.

    Cloudflare financial statements

    Analysts recommendation: 2.14

    Financial Health

    • Return on assets (ROA): -2.73%
    • Return on equity (ROE): -11.04%
    • Return on investment (ROI): -2.52%

    Profitability

    • Gross margin: 76.14%
    • Operating margin: -13.13%
    • Net profit margin: -6.22%

    Growth

    • EPS (past 5 years): 8.13%
    • EPS (current): -0.34
    • EPS estimate (next quarter): 0.23
    • EPS growth (this year): 14.46%
    • EPS growth (next year): 29.33%
    • EPS growth (next 5 years): 24.94%
    • EPS growth (quarter-over-quarter): -227.77%
    • Sales growth (past 5 years): 42.21%
    • Sales growth (quarter-over-quarter): 27.8%

    💡 Why invest in Cloudflare?

    Like a global network shield that protects and accelerates internet traffic worldwide, Cloudflare demonstrates compelling strengths for cloud security investors:

    • Robust Growth Trajectory: Cloudflare demonstrates exceptional revenue momentum with 29% growth in 2024 and sustained 25-27% expansion rates, supported by strong enterprise customer acquisition and increasing deal sizes.
    • Strong Product Differentiation: With edge computing, AI integration, and Zero Trust security built into its core platform, Cloudflare remains well-positioned in competitive markets through innovative technology solutions.
    • High Value Customer: Q4 2024 saw a 47% increase in $1M+ customers, with 173 such contracts, including the largest-ever deal exceeding $100M, demonstrating strong enterprise market penetration and customer expansion capabilities.
    • Cash Rich Model: Despite GAAP losses, free cash flow exceeded $166 million in 2024, with non-GAAP earnings turning positive and strong operating leverage indicating improving financial performance and business model efficiency.

    🐌 Key considerations before investing in Cloudflare

    However, prospective investors should weigh the following challenges:

    • GAAP Profitability Negative: While non-GAAP profits improve, Cloudflare still posted GAAP losses, which may concern conservative investors seeking immediate profitability and traditional financial metrics for validation.
    • Potential Valuation Risks: Shares surged approximately 67% year-to-date in 2025, raising the risk of a significant pullback if growth metrics or guidance disappoints investors, creating potential volatility.
    • Guidance Sensitivity Volatility: Q1 2025 projection fell slightly short of analyst expectations, indicating sensitivity to guidance delivery and potential challenges in meeting market forecasts and investor confidence.
    • Intense Competition Pressure: The cybersecurity and edge computing sectors are crowded, with strong competition from established players like Palo Alto, Microsoft, and AWS challenging market share and pricing power.

    Final thoughts on Cloudflare

    Cloudflare has demonstrated strong 2024 growth and entered 2025 with robust momentum, powered by enterprise deals, innovative edge and security offerings, and improving cash flows. Its differentiated, AI-infused platform and customer expansion strategy support long-term scalability and defensibility. However, investors should remain cautious of its GAAP losses, valuation stretch, occasional guidance softening, and intensifying competition in the sector.

  • CrowdStrike (NYSE:CRWD)

    CrowdStrike Holdings Inc is a cybersecurity technology company that provides cloud-native endpoint security solutions to organizations worldwide. Founded in 2011 by George Kurtz and Dmitri Alperovitch and headquartered in Austin, Texas, the company has quickly become a leader in endpoint security, threat intelligence, and cyberattack response. CrowdStrike`s Falcon platform revolutionized cybersecurity with its cloud-native architecture, providing real-time protection and visibility across organizations of all sizes.

    The company specializes in preventing, detecting, and responding to sophisticated cyber threats through its AI-powered solutions and advanced threat intelligence capabilities. Its services include endpoint protection, managed threat hunting, and proactive incident response, catering to industries such as finance, healthcare, and government sectors. With a strong focus on innovation and scalability, CrowdStrike has earned a reputation as a trusted partner in securing critical systems and sensitive data worldwide.

    CrowdStrike financial statements

    Analysts recommendation: 1.87

    Financial Health

    • Return on assets (ROA): -2.05%
    • Return on equity (ROE): -8.92%
    • Return on investment (ROI): -6.52%

    Profitability

    • Gross margin: 74.16%
    • Operating margin: -6.38%
    • Net profit margin: -6.84%

    Growth

    • EPS (past 5 years): 34.76%
    • EPS (current): -1.2
    • EPS estimate (next quarter): 0.94
    • EPS growth (this year): -6.71%
    • EPS growth (next year): 29.98%
    • EPS growth (next 5 years): 16.22%
    • EPS growth (quarter-over-quarter): -266.11%
    • Sales growth (past 5 years): 52.37%
    • Sales growth (quarter-over-quarter): 21.3%

    💡 Why invest in CrowdStrike?

    CrowdStrike`s unique position in the cybersecurity industry offers several potential advantages for investors seeking exposure to this critical sector:

    • Essential Cybersecurity Solutions: In today`s interconnected world, robust cybersecurity is no longer optional, and CrowdStrike`s solutions safeguard businesses from cyberattacks with irreplaceable protection capabilities.
    • Cloud-Native Security Advantage: Their focus on cloud-based security aligns perfectly with the growing adoption of cloud computing, ensuring their solutions remain relevant, scalable, and future-ready for enterprises.
    • Continuous Innovation Leadership: CrowdStrike recognizes the constantly evolving nature of cyber threats and continuously develops their cloud-powered security platform, staying ahead of emerging threats globally and effectively.
    • Strong Revenue Growth: CrowdStrike boasts a history of consistent revenue growth, demonstrating the increasing demand for their innovative cybersecurity solutions across global enterprise markets worldwide.

    🐌 Key considerations before investing in CrowdStrike

    However, before investing in CrowdStrike Holdings, it`s crucial to consider the potential challenges they face:

    • High Stock Valuation: CrowdStrike`s high valuation reflects its strong growth potential, but it may also leave less room for future stock price appreciation in competitive market conditions globally and domestically.
    • Market Competition Intensity: The cybersecurity market is crowded with established players and nimble startups vying for market share, requiring CrowdStrike to maintain their technological edge continuously worldwide.
    • Evolving Threat Landscape: The ever-changing nature of cyber threats requires CrowdStrike to continuously adapt and improve their security platform to stay effective against sophisticated attacks globally and consistently.
    • Subscription Revenue Dependency: Their revenue stream relies heavily on recurring subscriptions, and any slowdown in customer acquisition or increased churn could impact their financial performance significantly worldwide.

    Final thoughts on CrowdStrike

    CrowdStrike`s strong market position, cloud-native advantage, focus on innovation, and impressive growth trajectory create compelling opportunities for long-term investors seeking exposure to the cybersecurity sector. However, high valuation, competitive pressures, evolving threats, and subscription dependency require careful evaluation of the company`s strategic positioning and execution capabilities. Investors should thoroughly research CrowdStrike`s platform capabilities and competitive advantages before making investment decisions in this cybersecurity leader.

  • Fortinet (NYSE:FTNT)

    Fortinet is a global cybersecurity company that provides comprehensive security solutions for networks, applications, and cloud environments. Headquartered in Sunnyvale, California, Fortinet was founded in 2000 by brothers Ken and Michael Xie. Over the years, the company has become a leader in the cybersecurity industry, known for its cutting-edge technologies and innovative approach to protecting organizations from evolving threats.

    The company`s core business revolves around its FortiGate product line, which includes firewalls, VPNs, and other network security solutions. In addition to hardware, Fortinet offers a wide range of software and cloud-based services, such as endpoint protection, threat intelligence, and security orchestration. With a strong emphasis on performance and scalability, Fortinet serves enterprises, government agencies, and service providers globally, helping them secure their digital infrastructure and adapt to the ever-changing security landscape.

    Fortinet financial statements

    Analysts recommendation: 2.59

    Financial Health

    • Return on assets (ROA): 13.02%
    • Return on equity (ROE): 165.17%
    • Return on investment (ROI): 75.86%

    Profitability

    • Gross margin: 81.29%
    • Operating margin: 28.02%
    • Net profit margin: 30.6%

    Growth

    • EPS (past 5 years): 42.92%
    • EPS (current): 2.51
    • EPS estimate (next quarter): 0.63
    • EPS growth (this year): 16.3%
    • EPS growth (next year): 10.22%
    • EPS growth (next 5 years): 8.89%
    • EPS growth (quarter-over-quarter): 15.47%
    • Sales growth (past 5 years): 22.46%
    • Sales growth (quarter-over-quarter): 13.6%

    💡 Why invest in Fortinet?

    Fortinet`s strong position in the cybersecurity industry offers several potential advantages for investors seeking exposure to this critical sector:

    • Essential Business Operations: In today`s digital world, robust cybersecurity is no longer optional but essential for business continuity, translating to consistent demand for Fortinet`s comprehensive security solutions.
    • Growing Threat Landscape: The number and sophistication of cyberattacks are constantly rising, creating long-term demand for advanced security solutions and positioning Fortinet well for sustained growth in cybersecurity markets.
    • Broad Product Portfolio: They offer a comprehensive range of security solutions, catering to diverse customer needs and reducing reliance on any single product while providing integrated cybersecurity platforms for enterprise clients.
    • Research Development Focus: Fortinet actively invests in research and development, ensuring their solutions stay ahead of the evolving cyber threat landscape through continuous platform enhancements and emerging technology integration.

    🐌 Key considerations before investing in Fortinet

    However, before investing in Fortinet, it`s crucial to consider the potential challenges they face:

    • Cybersecurity Market Pressure: The cybersecurity market is crowded with established players and nimble startups vying for market share, requiring Fortinet to maintain technological edge and competitive pricing to preserve market position.
    • Industry Consolidation Trends: The cybersecurity industry is experiencing consolidation, with larger players acquiring smaller ones, creating strategic challenges and potential disruption to Fortinet`s competitive landscape and partnerships.
    • Evolving Threat Challenges: Cybersecurity threats are constantly evolving, requiring Fortinet to continuously innovate and adapt their security platforms to stay ahead of sophisticated cybercriminals and emerging attack vectors.
    • Integration Complexity Issues: Implementing and managing complex security ecosystems can be challenging for businesses, potentially impacting Fortinet`s adoption rates and requiring significant customer support and professional services.

    Final thoughts on Fortinet

    Fortinet`s strong brand recognition, established customer base, broad product portfolio, and innovation focus create compelling opportunities for investors seeking exposure to the essential cybersecurity sector. However, competitive pressures, industry consolidation, evolving threats, and integration complexity require careful evaluation of the company`s strategic positioning and execution capabilities. Investors should thoroughly research Fortinet`s product roadmap and competitive advantages before making investment decisions in this cybersecurity leader.

  • Rubrik (NYSE:RBRK)

    Rubrik, Inc. is a cloud data management and cyber-resilience company that provides comprehensive data protection and security solutions for enterprises worldwide. Founded in 2014 in Palo Alto, California, by Bipul Sinha, Arvind Jain, Soham Mazumdar, and Arvind Nithrakashyap, the company has rapidly established itself as a leader in the data protection market. The company went public via a NYSE IPO in April 2024 and saw remarkable stock performance, with its total return soaring approximately 194% over the past 12 months, significantly outperforming the S&P 500.

    Rubrik`s core business centers on converged data management and data security, providing hybrid cloud solutions that integrate backup, recovery, and continuous cyber protection. Its Zero Trust Data Security platform enables live data access and protection across on-premises and cloud environments, supporting resilience against cyberattacks and operational disruptions. With a rapidly expanding customer base and strong ARR growth, Rubrik empowers enterprises to secure, manage, and leverage their data efficiently in increasingly complex IT landscapes.

    Rubrik financial statements

    Analysts recommendation: 1.32

    Financial Health

    • Return on assets (ROA): -14.85%
    • Return on equity (ROE): N/A
    • Return on investment (ROI): -75.09%

    Profitability

    • Gross margin: 77.96%
    • Operating margin: -30.49%
    • Net profit margin: -41%

    Growth

    • EPS (past 5 years): -57.67%
    • EPS (current): -1.08
    • EPS estimate (next quarter): -0.17
    • EPS growth (this year): 69.56%
    • EPS growth (next year): 77.37%
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): 49.97%
    • Sales growth (past 5 years): 22.97%
    • Sales growth (quarter-over-quarter): 51.2%

    💡 Why invest in Rubrik?

    Rubrik offers several compelling reasons to consider investing:

    • Accelerating Subscription Growth: Subscription ARR surged 54% year-over-year in fiscal 2025, signaling strong demand and successful upsell execution while demonstrating the company`s ability to expand within existing customer accounts.
    • Cloud Native Platform: Rubrik`s data protection platform is built for modern hybrid environments, appealing to enterprises seeking security and resilience through innovative Zero Trust architecture and data management.
    • Improving Financial Performance: Significant progress in operating leverage led to free cash flow of $75 million in Q4 and narrower losses per share, indicating strong business model efficiency and path toward sustainable profitability.
    • High Customer Retention: Consistent NRR above 120% and expansion into large enterprise segments with 2,246 customers generating over $100K ARR demonstrates strong customer loyalty and revenue growth potential.

    🐌 Key considerations before investing in Rubrik

    However, prospective investors should weigh the following challenges:

    • GAAP Profitability Challenges: Despite improving margins, the company remains GAAP unprofitable, with a full-year loss per share of $(7.48) and elevated stock compensation costs that continue to pressure financial performance.
    • Highly Competitive Market: Rubrik competes with major players like Commvault, Veeam, and new entrants, requiring constant innovation to maintain differentiation while facing pricing pressure and market share challenges.
    • Operational Scaling Risks: Rapid growth demands could strain support infrastructure and service delivery capabilities, as hinted by some customer service complaints, potentially impacting customer satisfaction and retention rates.
    • High Valuation Sensitivity: A recent 48% stock surge in 2025 suggests elevated growth expectations that could reverse with any setback, creating significant downside risk if the company fails to meet ambitious market forecasts.

    Final thoughts on Rubrik

    Rubrik has emerged as a fast-growing leader in cloud-native data resilience, showing substantial ARR growth, improving financial discipline, and strong customer loyalty. Its differentiated Zero Trust platform positions it well in an expanding cybersecurity market. Investors should, however, be mindful of its ongoing GAAP losses, competitive pressures, service delivery execution, and valuation dependence on milestone execution.

  • Zscaler (NYSE:ZS)

    Zscaler, Inc. is a cloud-native cybersecurity company delivering comprehensive security services via its Zero Trust Exchange platform to enterprises across more than 125 countries. Founded in 2007 and headquartered in San Jose, California, Zscaler has rapidly scaled its network to over 330 data centers worldwide. In the past year, its stock has seen a total return of approximately +75%, significantly outperforming the S&P500 (~14%), and its share price has climbed about +64% year-to-date, reflecting strong investor confidence.

    Zscaler`s core business is centered on delivering cloud-based security solutions that replace traditional on-premises architectures with scalable, automated protective services. Its platform includes Zero Trust Internet Access, Private Access, and Security Service Edge (SSE), protecting user connections, cloud workloads, and web applications from threats using AI, machine learning, and extensive threat intelligence. By continuously enhancing its capabilities such as adding SASE and AI-powered bot detection Zscaler empowers organizations to securely embrace cloud transformation and remote work.

    Zscaler financial statements

    Analysts recommendation: 1.6

    Financial Health

    • Return on assets (ROA): -1.37%
    • Return on equity (ROE): -2.7%
    • Return on investment (ROI): -1.17%

    Profitability

    • Gross margin: 76.99%
    • Operating margin: -3.62%
    • Net profit margin: -1.55%

    Growth

    • EPS (past 5 years): 21.31%
    • EPS (current): -0.28
    • EPS estimate (next quarter): 0.86
    • EPS growth (this year): 11.37%
    • EPS growth (next year): 20.27%
    • EPS growth (next 5 years): 18.14%
    • EPS growth (quarter-over-quarter): -14.36%
    • Sales growth (past 5 years): 44.03%
    • Sales growth (quarter-over-quarter): 21.3%

    💡 Why invest in Zscaler?

    Zscaler offers several compelling reasons to consider investing:

    • Rapid Revenue Growth: After 34% revenue growth in 2024, Zscaler reached $2.17B, supported by broad enterprise adoption of SASE and Zero Trust platforms while expanding its global customer base and market penetration significantly.
    • Zero Trust Leadership: The company is consistently ranked a market leader, with its cloud-native platform processing trillions of transactions daily a strong competitive moat and technological differentiation.
    • Innovative Product Expansions: Strategic partnerships with companies like Vectra AI and acquisitions like Red Canary reinforce its threat detection and cybersecurity ecosystem, enhancing platform capabilities and market competitiveness.
    • Recurring Subscription Model: High renewal rates and expanding billings maintain predictable, recurring revenue streams and strong deferred revenue growth, providing financial stability and visibility for long-term business planning.

    🐌 Key considerations before investing in Zscaler

    However, prospective investors should weigh the following challenges:

    • Revenue Growth Deceleration: After 2024 growth, revenue fell approximately 8% year-over-year by April 2025, indicating slower momentum and potential market saturation that could impact future growth prospects and investor confidence.
    • Profitability Challenges Persist: The firm remains loss-making under GAAP accounting, with non-GAAP adjustments masking core losses, raising concerns about underlying profitability and sustainable business model economics.
    • Competitive Market Pressures: Zscaler faces pressure from major players like Palo Alto Networks, Microsoft, and emerging rivals like Wiz, challenging market share and pricing power in competitive cybersecurity segments.
    • Valuation Premium Risks: Its high-growth premium has cooled, evidenced by a 16% stock decline in 2024 and post-earnings dips on conservative guidance, creating valuation risk if growth expectations are not met consistently.

    Final thoughts on Zscaler

    Zscaler stands as a leading innovator in cloud-based security with a scalable subscription model, strong platform differentiation, and solid 2024 expansion. While growth has moderated in early 2025 and the company remains non-GAAP profitable, its focus on AI-driven capabilities and platform integration positions it well for future enterprise adoption. However, investors should weigh valuation normalization, ongoing GAAP losses, and intensifying competitive pressures when assessing Zscaler`s long-term investment potential.

  • F5 (NYSE:FFIV)

    F5, Inc. (formerly F5 Networks) is a technology company that specializes in application delivery, multi-cloud security, and zero-trust solutions. Founded in 1996 and headquartered in Seattle, Washington, F5 has established itself as a key player in managing and securing internet traffic for Fortune 500 firms, with stock rallying approximately +40.5% over the past 12 months and hitting a 52 week high near $313 and demonstrating strong investor confidence

    F5`s core business centers on its flagship BIG IP platform available in hardware, virtual, and SaaS formats delivering application delivery controllers (ADCs), web application firewall (WAF), secure remote access, and API protection. The company has evolved F5 ADSP solutions into full zero-trust architectures, providing granular application-layer enforcement, encrypted traffic inspection, and identity-aware proxy services. With growing adoption of its ADSP and partnerships with cloud and identity providers, F5 fortifies digital transformation initiatives by ensuring performance, reliability, and security for enterprise applications.

    F5 financial statements

    Analysts recommendation: 2.81

    Financial Health

    • Return on assets (ROA): 8.27%
    • Return on equity (ROE): 20.58%
    • Return on investment (ROI): 18.03%

    Profitability

    • Gross margin: 81.03%
    • Operating margin: 25.16%
    • Net profit margin: 22.06%

    Growth

    • EPS (past 5 years): 6.18%
    • EPS (current): 11.35
    • EPS estimate (next quarter): 3.97
    • EPS growth (this year): 33.2%
    • EPS growth (next year): 5.54%
    • EPS growth (next 5 years): 8.72%
    • EPS growth (quarter-over-quarter): 33.28%
    • Sales growth (past 5 years): 4.66%
    • Sales growth (quarter-over-quarter): 12.2%

    💡 Why invest in F5?

    F5 offers several compelling reasons to consider investing:

    • Market Leadership Infrastructure: F5 is trusted by 85% of Fortune 500 companies, underlining its dominance in application delivery and security while providing a stable foundation for recurring revenue growth and expansion.
    • Software Growth Acceleration: The company saw 19% growth in software revenue in Q4 2024, shifting its business toward recurring, higher-margin offerings that provide predictable cash flows and improved profitability metrics.
    • Strong Operational Margins: With non-GAAP operating margins above 34% and free cash flow margins around 40%, F5 demonstrates disciplined financial execution and efficient capital allocation that supports sustainable business growth.
    • Strategic Cloud Positioning: Ongoing acquisitions like NGINX, Shape Security, Volterra, and Wib bolster its capabilities in multicloud, automated security, and edge platforms, enhancing competitive differentiation and market expansion.

    🐌 Key considerations before investing in F5

    However, prospective investors should weigh the following challenges:

    • Enterprise Spending Sensitivity: The company`s 2024 warning about flat to slight revenue decline highlights vulnerability to cautious IT budgets and economic uncertainty that could impact customer purchasing decisions.
    • Hardware Legacy Drag: Although shifting to software, F5 still carries hardware and services components that may limit margin expansion potential and create operational complexity in transitioning to cloud-native business models.
    • Competitive Cloud Landscape: F5 faces intense pressure from major players like AWS, Microsoft, and cloud security specialists as enterprises migrate to cloud-centric solutions, challenging traditional market positioning and pricing power.
    • Growth Expectations Pressure: With 2025 guidance calling for modest 4 5% revenue growth, upside may be capped unless cloud-driven momentum accelerates significantly, potentially disappointing investors seeking higher growth rates.

    Final thoughts on F5

    F5 remains a stalwart in application delivery and security, leveraging its robust installed base and leadership in global enterprises. Its transition toward software and cloud services has improved margins and recurring revenue, though growth may stay moderate amid cautious spending. Investors should closely monitor its execution in expanding multi-cloud capabilities, competitive positioning, and ability to unlock next-generation edge and security revenue.

  • Check Point (NYSE:CHKP)

    Check Point Software Technologies is a global leader in cybersecurity solutions, specializing in network security, endpoint protection, and cloud security. The company was founded in 1993, and is headquartered in Tel Aviv, Israel. Known for its pioneering role in the development of firewall technology, Check Point has grown into a trusted provider of comprehensive security solutions for enterprises and governments worldwide.

    The core business of Check Point focuses on delivering advanced threat prevention solutions that safeguard organizations from cyberattacks. Its portfolio includes next-generation firewalls, intrusion prevention systems, mobile security, and threat intelligence services. By leveraging artificial intelligence, machine learning, and real-time threat intelligence, Check Point continuously enhances its security offerings, ensuring robust protection across networks, endpoints, and cloud environments.

    Check Point financial statements

    Analysts recommendation: 2.27

    Financial Health

    • Return on assets (ROA): 9.67%
    • Return on equity (ROE): 30.3%
    • Return on investment (ROI): 30.27%

    Profitability

    • Gross margin: 88.01%
    • Operating margin: 30.61%
    • Net profit margin: 32.48%

    Growth

    • EPS (past 5 years): 6.34%
    • EPS (current): 7.68
    • EPS estimate (next quarter): 2.45
    • EPS growth (this year): 5.7%
    • EPS growth (next year): 8.2%
    • EPS growth (next 5 years): 8.85%
    • EPS growth (quarter-over-quarter): 5.71%
    • Sales growth (past 5 years): 5.16%
    • Sales growth (quarter-over-quarter): 6%

    💡 Why invest in Check Point?

    Check Point Software Technologies offers several potential advantages for investors seeking exposure to the cybersecurity industry:

    • Essential Security Products: Cybersecurity is a critical concern for businesses and organizations, making Check Point`s comprehensive security solutions essential in today`s increasingly digital and threat-prone business environment.
    • Strong Market Position: Check Point is a well-established player in the cybersecurity market, with a reputation for innovation and reliability built over decades of serving enterprise customers worldwide.
    • Recurring Revenue Model: The company`s subscription-based business model generates a steady stream of recurring revenue from enterprise customers, providing predictable cash flows and long-term customer relationships.
    • Cybersecurity Growth Potential: The increasing reliance on digital technologies and the evolving threat landscape present significant growth opportunities for comprehensive cybersecurity solutions and advanced threat prevention platforms.

    🐌 Key considerations before investing in Check Point

    However, before investing in Check Point, it`s crucial to consider these potential challenges:

    • Threat Evolution Challenges: The cybersecurity landscape is constantly changing, requiring continuous investment in research and development to stay ahead of emerging threats and sophisticated attack vectors targeting enterprise networks.
    • Enterprise Market Competition: The cybersecurity market is highly competitive, with both established players and new entrants vying for market share through innovative solutions and aggressive pricing strategies in enterprise segments.
    • Economic Downturn Sensitivity: During economic downturns, businesses may reduce cybersecurity spending and delay infrastructure upgrades, potentially impacting demand for Check Point`s premium security solutions and services.
    • Regulatory Environment Complexity: Cybersecurity regulations and compliance requirements can be complex and subject to change, requiring continuous adaptation of products and services to meet evolving regulatory standards globally.

    Final thoughts on Check Point

    Check Point Software Technologies` strong market position, focus on innovation, and recurring revenue model make it an attractive investment for those seeking exposure to the cybersecurity industry. However, the rapidly evolving threat landscape, competition, economic sensitivity, and regulatory environment necessitate careful consideration. Thorough research on Check Point`s product pipeline, financial performance, and the overall cybersecurity market trends is crucial before investing.

  • Varonis Systems (NYSE:VRNS)

    Varonis Systems is a cybersecurity software company that specializes in data security and analytics, helping organizations manage and protect their sensitive information. Founded in 2005 and headquartered in New York City, the company has built a strong presence in the data protection sector by focusing on insider threats and access control. Over the past year, Varonis stock has gained approximately 34%, reflecting solid investor confidence amid growing demand for data security solutions.

    The core business of Varonis revolves around its data-centric security platform, which provides visibility and control over critical data, including files, emails, and sensitive records. The platform leverages automation and machine learning to detect threats, enforce least-privilege access, and ensure compliance across on-premises and cloud environments. Varonis is particularly known for its effectiveness in securing unstructured data such as documents and spreadsheets which often represents the bulk of an organization`s risk exposure.

    Varonis Systems financial statements

    Analysts recommendation: 1.58

    Financial Health

    • Return on assets (ROA): -5.27%
    • Return on equity (ROE): -25.73%
    • Return on investment (ROI): -12.36%

    Profitability

    • Gross margin: 81.46%
    • Operating margin: -24.02%
    • Net profit margin: -17.29%

    Growth

    • EPS (past 5 years): 0.23%
    • EPS (current): -0.92
    • EPS estimate (next quarter): 0.06
    • EPS growth (this year): -56.88%
    • EPS growth (next year): 160.48%
    • EPS growth (next 5 years): 22.69%
    • EPS growth (quarter-over-quarter): -49.39%
    • Sales growth (past 5 years): 16.73%
    • Sales growth (quarter-over-quarter): 16.7%

    💡 Why invest in Varonis Systems?

    Varonis Systems offers several compelling reasons to consider investing:

    • Cloud Transition Success: ARR rose 18% in 2024, and SaaS now exceeds 50% of ARR, reflecting strong momentum in recurring revenue while demonstrating successful business model transformation and customer adoption.
    • Free Cash Flow: The company produced $108 million in free cash flow in 2024, doubling the previous year and supporting financial flexibility while providing resources for continued investment and growth.
    • Platform Technical Depth: Its comprehensive metadata-driven platform has earned Gartner recognition and >90% renewal rates among large enterprises, demonstrating strong customer satisfaction and competitive differentiation.
    • Market Leadership Signals: Varonis recently achieved an RS rating of 82 and is forming a cup-with-handle pattern, signaling technical strength and positive investor sentiment while indicating potential appreciation.

    🐌 Key considerations before investing in Varonis Systems

    However, prospective investors should weigh the following challenges:

    • Business Model Transition: Revenue growth in SaaS is robust, but traditional license streams are declining, creating transitional pressure and potential volatility in financial performance during the transformation period.
    • Operating Loss Challenges: The company posted GAAP operating losses near $118 million, suggesting it still struggles to reach full profitability while investing heavily in growth initiatives and platform development.
    • Economic Sensitivity Risks: Broader macroeconomic tightening and budget controls in large enterprises could slow sales adoption and impact customer acquisition rates, affecting revenue growth and market expansion plans.
    • Platform Competition Challenges: The increased inclusion of DLP and risk tools in broader security platforms may challenge Varonis`s value proposition and market positioning, requiring continued innovation and differentiation.

    Final thoughts on Varonis Systems

    Varonis is successfully navigating its transition from legacy licensing to a SaaS-driven, metadata-first security platform with strong ARR growth, free cash flow, and technical market momentum. Its depth in data security, high renewal rates, and AI-enhanced capabilities position it well in the evolving cybersecurity space. Yet, profitability remains elusive under GAAP, and competition and macroeconomic headwinds may impact future growth making execution on its SaaS transformation and market messaging critical.

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