4 Cybersecurity Stocks Beating The CIBR ETF
Ronald Kaufman | Apr 02, 2022 07:28AM ET
First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is a specialized fund, or ETF, that tracks the value of companies that are classified by the Consumer Technology Association (CTA) as cybersecurity companies.
This specialized fund comprises companies operating in the software and networking industries, as well as other industries like defense and aerospace. CIBR stands out because of its diversified portfolio of companies and the weighting techniques used which weight holdings by liquidity, capping the weighting of the five most liquid companies' securities at 6%.
Source: TradingView
Currently trading at $53.70, CIBR ETF performs well on the stock market, but for those who want a stronger return not weighed down by underperformers in the fund, here are 4 individual cybersecurity companies that are earning the attention of analysts and investors for outperforming the CIBR ETF.
The chart below compares the performance of CIBR ETF against Palo Alto, Hub Security, Nice, and Check Point. All four of these stocks have outperformed CIBR over the last 12 months, and with the exception of Nice (which is down this month), continue to do so.
Source: TradingView
h2 1. Palo Alto Networks/h2Palo Alto Networks (NASDAQ:PANW) is listed as the third best performing stock within the CIBR ETF. PANW recently surpassed the average analyst 12-month target price of $609.03. Analysts predict that the target price will be revalued higher and that shares of Palo Alto Networks stock will continue increasing in value towards the new target price of $629.42.
Palo Alto Networks has 8.1 million shares in the U.S. ETF market. Within CIBR, PANW is the top-performer, even though separately, it outperforms the fund.
The stock is currently valued at $625.25, with 94.48M shares outstanding. Fourteen analysts recommend the stock as a "strong buy," and 23 more analysts consider the stock a "buy."
h2 2. Check Point Software Technologies/h2
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Check Point Software Technologies (NASDAQ:CHKP) is a holding in 82 U.S. traded ETFs and has close to 5.2 million shares in the U.S. ETF market. Check Point Software Technologies stock was given a target price of $133.18 from brokerage analysts. CIBR is also the best performing ETF for CHKP, but again, the stock outperforms the fund.
Shares of Check Point are currently trading at $139.23. Seven brokerages have rated the stock as a "buy" which brings analysts’ recommendations to an average rating of "hold."
The average 12-month target price for shares of Check Point Software stock has been updated to $132.92. The 52-week range of the stocks is $107.85 to $149.62.
h2 3. Nice/h2Nice (NASDAQ:NICE) is an Israeli cybersecurity and technology system company whose stock was outperforming CIBR until earlier this March, and is expected to continue that trend soon. The 12-month target price for Nice shares is set at $327.22 by analysts.
The current share value of NICE is $224.70 which sits at the low end of the 52-week range. The stock shows a 3-year EPS growth rate of 6.44 which indicates growth potential for investors.
h2 4. Hub Security/h2Hub Cyber Security Israel (TASE:HUB) develops Confidential Computing cybersecurity solutions and associated services. Earlier this month, the company announced that it had agreed to be acquired by SPAC, Mount Rainer Acquisition Corporation (NASDAQ:RNER). The $1.3 billion deal is expected to be finalized in the third quarter of 2022 and will position Hub Security as an industry leader. The company will be listed on the NASDAQ under the ticker HUBC.
Hub Security has performed well on the Tel Aviv Stock Exchange (TASE:TASE). Hub Security shares have been volatile with a 52-week range of $281.10 to $929.90. The volatility of the stock has encouraged investors on the potential upswing of the stock value.
Hub Security is succeeding in the rapidly growing cybersecurity market, which is expected to reach $54 Billion by 2026. Revenues at the company continue to increase year after year. The strategic acquisition with Mount Rainer Acquisition Corporation will expedite growth for Hub Security.
The expected growth of Hub Security and the 2022 acquisition increase the investment potential of the company. Share values have consistently increased throughout the month of March, and continuous upside movement is likely.
h2 Bottom Line/h2CIBR’s market value and activity differ from the individual companies within the fund. Palo Alto and Check Point Software are included in the fund, but their performance beats that of the ETF, as does Hub Security.
SPAC deals, like that at Hub Security, have the power to influence market value in a positive direction, and as the deal is executed, Hub may have the strongest upside potential of the four. Nice is currently underperforming, but is a value buy at the current price and is expected to beat CIBR again soon.
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