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The cybersecurity sector is a compelling industry to invest in. Customer demand remains strong, and cyberattacks show no signs of slowing down. The intense cyberattack on Chinese artificial intelligence start-up DeepSeek in January and the hack of the U.S. Treasury Department in December are just two recent examples.
Two vital cybersecurity suppliers that investors deserve to add their portfolios are Palo Alto networks (PANW -0. 88%) and Sentinelona (S -1. 63%). The first is the largest corporate capitalization of cyber security through the market. The latter has placed AI in the center of its platform since its base in 2013. The two are strong players, but what seems to the head like the most productive long -term cybersecurity investment?
SentinelOne differentiates itself from competitors with the autonomous nature of its AI platform, which allows it to respond to attacks faster, and to automatically scale up its response when threats proliferate. SentinelOne’s platform also requires no software updates, while competitors perform these frequently, which introduces risks. The nature of those risks became apparent last year when rival CrowdStrike released an update to its cybersecurity software that contained a glitch that knocked vast numbers of Windows machines offline, causing a global IT outage.
The strength of the Sentinelon platform allowed him to develop his source of income up to 28% of one year to 210. 6 million dollars in his third budget quarter, which ended on October 31. This expansion received a kind for Crowdsstrike rap. “We have achieved a record number of victories through consumers opposed to our closest competitor in the third quarter,” said Sentineone CEO, Tomer Weingarten.
The management hopes to inform that the sales expansion continued in its fourth fiscal quarter, predicting profits of $ 222 million, compared to $ 174. 2 million in the previous year.
However, the company is profitable. In the third fiscal quarter, he reserved a net loss of $ 78. 4 million, his higher sales and marketing expenses 26% year after year to $ 123. 7 million. The company is aggressively spending on these spaces to boost profits.
Palo Alto Networks uses AI in its solutions, but its big push is into a strategy it calls platformization — getting customers to adopt a single platform for all their cybersecurity needs.
The company sees platformization as inevitable, based on the premise that customers will eventually want to consolidate their cybersecurity spending. Currently, the market is swamped with players, and businesses may end up buying more than a dozen different cybersecurity services from various vendors, which don’t always work in concert to stop attacks.
Based on the effects of its first quarter for monetary year 2025, the platform strategy works. Sales of Palo Alto networks above 14% in the annual change to $ 2. 1 billion in the period, which ended on October 31. In addition, the annualized recurrent source of income (Rard) higher by 40% to 4. 5 billion dollars. More from this arrived here from the consumers who followed the platform. Sud measures the general source of income that the company receives from its visitors contracts during an annual period. Palo Alto Networks aims to be replaced at $ 15 billion until the 2030s.
The company also controlled its costs, allowing the net net income of the first quarter to be successful at $ 350. 7 million, an 81% construction compared to the $ 194. 2 million in the era of last year.
The selection between Palo Alto networks and the path is clear. The two recently demonstrated the strength of their cybersecurity responses with a two -digit sales expansion from one year to another.
So let’s take a look at the evaluation of each action that uses the value / sale ratio (P / S), which measures how investors are in a position to pay each of the dollar’s income. This metric is used to evaluate corporations that are not yet profitable, such as Sentinelone.
SentinelOne has the lower P/S multiple at the time of this writing, indicating it’s a better value. That said, Palo Alto Networks warrants a higher valuation since it’s profitable, and those profits are growing.
Palo Alto Networks’ 81% year-over-year net income growth in Q1 led to a substantial increase in diluted earnings per share (EPS). The company’s Q1 EPS of $0.99 was nearly double the prior-year period’s $0.56. Its solid financials are enabling it to thrive against rivals in a highly competitive space. This, combined with a platformization strategy that’s helping it increase ARR, makes Palo Alto Networks the superior long-term cybersecurity investment.
Robert Izquierdo has positions in Crowdsstrike, Palo Alto Networks and Sentinelona. Motley Fool has positions and recommends Crowdsstrike. The Motley Fool recommends Palo Alto networks. The silly fool has a dissemination.
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