CrowdStrike, CyberArk, and Tenable are all great plays on this booming market.
Many tech stocks were rattled by recent concerns about rising tariffs, sticky inflation, and elevated interest rates. However, the cybersecurity sector has traditionally been well-insulated from those macro headwinds since companies generally won’t shut down their digital defenses just to save a few dollars.
It can be tougher for cybersecurity companies to lock in big contracts during economic downturns, but the market leaders with sticky business models and wide moats should bounce back and keep growing. Let’s look at three of those resilient companies — CrowdStrike (CRWD 3.25%), CyberArk (CYBR 2.19%), and Tenable (TENB 1.86%) — and see why they could still be great plays on the expansion of the cybersecurity market over the next decade.
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1. CrowdStrike
Many cybersecurity companies install on-premise appliances to run their services, but that approach takes up space, consumes a lot of power, and can be expensive to scale as an organization expands. CrowdStrike addresses those challenges with its cloud-native platform, Falcon, which doesn’t require any on-site appliances.
Instead, Falcon locks its customers into its subscription-based platform and encourages them to adopt more security modules for specific services. By the end of fiscal 2025 (which ended this January), 67% of its customers had adopted at least five of those modules, more than double its ratio of 33% at the end of fiscal 2020.
From fiscal 2020 to fiscal 2025, its revenue grew at a compound annual growth rate (CAGR) of 52%, making it one of the sector’s fastest-growing companies. From fiscal 2025 to fiscal 2027, analysts expect its revenue to rise at a CAGR of 21%.
CrowdStrike’s business is maturing, but it could still have plenty of room to grow as more companies shift toward its cloud-based services. It might seem a bit pricey at 13 times next year’s sales, and it isn’t staying profitable on a generally accepted accounting principles (GAAP) basis yet, but it could remain one of the best growth stocks in the sector over the next decade.
2. CyberArk
Many cyberattacks occur when external attackers breach a company’s digital defenses. However, they can also originate from internal threats like disgruntled employees and corporate spies. CyberArk addresses the latter with its privileged access management (PAM) platform, which adds more layers of internal security, locates threats, and locks down compromised systems.
CyberArk controls about 38% of the PAM market, according to Morgan Stanley. Persistence Market Research expects that market to expand at a CAGR of 21.4% from 2024 to 2033, so CyberArk could still have plenty of room to grow.
From 2014 to 2024, CyberArk’s revenue grew at a CAGR of 26% as it expanded in that fertile niche market. Analysts expect its revenue to continue rising at a CAGR of 26% from 2024 to 2026. Its stock looks a bit cheaper than CrowdStrike’s at 10 times next year’s sales, but it also isn’t consistently profitable on a GAAP basis. But just like CrowdStrike, it could grow even bigger over the next decade as more companies focus on slippery internal threats.
3. Tenable
Tenable is another company that targets internal threats instead of external ones. But while CyberArk counters malicious attackers, Tenable’s main platform, Nessus, takes a more proactive approach by scanning an organization’s infrastructure for misconfigured software, weak passwords, and other security vulnerabilities.
Tenable bundles many of its services together in its all-in-one Tenable One platform. That exposure management platform allows companies to see the “modern attack surface” more clearly across multiple computing platforms and applications.
From 2019 to 2024, Tenable’s revenue grew at a CAGR of 20%. From 2024 to 2027, analysts expect its revenue to increase at a CAGR of 9%. Its business is maturing, but it finally turned profitable on a GAAP basis in the fourth quarter of 2024. Analysts expect it to stay profitable in 2025 and its EPS to surge roughly 29 times by 2027.
Tenable isn’t growing as rapidly as CrowdStrike or CyberArk, but it also looks a lot cheaper at four times next year’s sales. It could gradually head higher over the next few years as more companies focus on improving their own cybersecurity practices.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy.
