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Demand for Cybersecurity Products Surge: The Zacks Security industry is witnessing increased demand for cybersecurity solutions, primarily due to a rise in data breaches and the transition to hybrid work environments. Companies such as CyberArk Software Ltd. (CYBR), Okta, Inc. (OKTA), and Qualys, Inc. (QLYS) are benefitting, but growth may face challenges from delayed investments due to global economic slowdowns and rising operational costs.
Industry Performance: The Zacks Security industry ranks #19 among nearly 250 Zacks industries, placing it in the top 8%. The industry’s earnings estimate for 2025 has increased from $1.35 to $1.45 per share, and it has outperformed the S&P 500 with a 38.3% increase over the past year compared to the S&P 500’s 11.9% return.
Current Valuation: The industry has a forward price-to-sales ratio of 14.77, significantly higher than the S&P 500’s 5.12 and the sector’s 6.37. Despite the rising operational costs, companies continue to invest in R&D and marketing to maintain competitiveness in the market.
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