Q4 2020: Top Cybersecurity Stocks to Buy Now

Cybersecurity is going to be more and more important in today’s increasingly online world, but there’s still time to buy up big stocks like these.

| More on:
Knowledge concept with quote written on wooden blocks

Image source: Getty Images

Fourth-quarter earnings report are due out in just about a month. There are plenty of industries that investors will be watching closely, but perhaps none as closely as cybersecurity. This industry has been on a tear with the work-from-home economy at its peak. Companies need to know employees can work from home safely, keeping company data secure.

But that doesn’t necessarily mean that every cybersecurity stock is created equal. So before you buy up every one you can find, I would first add these to your watch list.

Open Text

Open Text Corp. (TSX:OTEX)(NASDAQ:OTEX) is one of the few companies with decades of software experience behind it. The company connects and manages business data within organization, and protects it from cyber threats, with artificial intelligence and analytics for better business performance, all within the cloud. The company has been picked up by companies like Alphabet and Amazon AWS for its cybersecurity network.

Shares are still down from February highs, offering a great opportunity to get in on this stock before earnings. The company reported a strong quarter in August with year-over-year revenue growth of 8.4%, with leveraged free cash flow growing to $948.2 million. Given that the company has recurring revenue through subscriptions, these numbers will likely only continue to increase when earnings come out Oct. 31, 2020.

BlackBerry

If you know anything about cybersecurity, you know that BlackBerry Ltd. (TSX:BB)(NYSE:BB) has stormed onto the cybersecurity stage. BlackBerry mainly offered businesses a way to protect the company from security threats. However, it has also bought its QNX software that keeps data in products like autonomous vehicles safe as well. Companies like Toyota have signed on to use the software as of late.

Again shares are still far lower than February highs, but have been climbing up. Blackberry has also gotten into the subscription recurring revenue game, but has a ways to go before turning a major profit. However, it’s seen year-over-year growth of 14% as of its last earnings report, which should continue. But it has much to prove during these next earnings reports, namely, that it can weather the economic downturn and take full advantage of today’s cybersecurity boom.

Absolute

Finally, we have Absolute Software Corp. (TSX:ABT), a company that provides cloud-based visibility and control platform to manage and secure devices, applications and data. These businesses tend to be enterprise level or public sector organizations. The company has been around since 1993, and has stretched around the world into almost every sector.

While the other stocks are down, Absolute is still up. The company has completely outpaced the market during this downturn, proving its worth in every way. Its year-over-year revenue growth stretched to 5.8% as of the last earnings report, and year-over-year earnings per share growing by 33% in that time. Sales should continue to rise, as should its stock as cybersecurity grows.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. David Gardner owns shares of Alphabet (A shares) and Amazon. Tom Gardner owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A shares) and Amazon. The Motley Fool recommends BlackBerry, BlackBerry, Open Text, and OPEN TEXT CORP and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.

More on Coronavirus

Aircraft wing plane
Coronavirus

Air Canada (TSX:AC) Stock: Ready to Take Off?

While Air Canada is handling what it can control really well, there are many worsening macro headwinds that will likely…

Read more »

rail train
Coronavirus

Bull or Bear: Why Analysts Changed Their Tune on Aecon Stock

Analysts had been champing at the bit for the construction company, but the tides have turned.

Read more »

Biotech stocks
Coronavirus

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

The biotech continues to make progress on obtaining FDA approval for its chronic-cough therapy.

Read more »

grow dividends
Coronavirus

Goodfood Stock Likely to Double in 2022!

Goodfood (TSX:FOOD) stock has had a huge rise and fall in the last few years. But at $1.85 a share,…

Read more »

grow dividends
Coronavirus

Canfor Stock Pops 5% as Sales Climb 15% YOY

Canfor (TSX:CFP) stock remained positive about its future in the global lumber market after profits climb 15% year over year.

Read more »

edit Safety First illustration
Coronavirus

2 Crash-Proof TSX Stocks I’d Buy With $5,000

These two TSX stocks have proven they can handle this economic downturn and likely will continue to be safe far…

Read more »

TSX Today
Coronavirus

What to Watch on the TSX on Tuesday, April 26

Earnings continue to come out on the TSX today, including Air Canada (TSX:AC). Meanwhile, investors may want to continue watching…

Read more »

think thought consider
Coronavirus

Should Investors Buy Goodfood Stock Ahead of Earnings?

Goodfood (TSX:FOOD) stock dropped on Wednesday ahead of the company's earnings release. And it's unclear whether there will be anything…

Read more »