The rise in cybersecurity investment is due to increased attacks. Stephens suggested that investors who are looking to make investments in the sector should check out names like CrowdStrike and Okta. Brian Colley began coverage on five software security names, including CrowdStrike. He stated that they both can profit from the rising cybersecurity demand. They gave both firms overweight ratings. Colley mentioned Okta’s growing adoption of cloud computing and hybrid IT as reasons for his liking. After the Lapsus$ hack, he believes that the stock trading is cheap relative to other peers. CrowdStrike’s Colley mentioned CrowdStrike’s cash flow as one of the reasons he initiated the stock. The company is capable of sustaining 35%+ ARR and generating 30%+ FCF margins over the next few years. These are attributed to 1) several secular tailwinds (proliferating cloud workloads, etc.Colley stated that the company has a growing TAM/product portfolio, growth in emerging products, continued strength in cross-sell/upsell and 5) continuing market share gains. Okta shares and CrowdStrike share prices have fallen by 63.2% & 28.4% respectively this year, but they are expected to rebound. Colley indicated that future earnings by both companies may be catalysts for stocks. Stephens targets Okta at $145 per share; CrowdStrike’s target for Okta is $232 per share. These forecasts show that Okta’s closing price on Wednesday could rise by 75.6%, and CrowdStrike will gain 58.2%. Zscaler, CyberArk, and KnowBe4 were also covered by the firm. — CNBC’s Michael Bloom contributed reporting
