The Best Cybersecurity Stock to Buy Right Now in July? | PANW, FTNT, S, RBRK, CRWD?

SUMMARY

Parkev Tatevosian, CFA, revisits his earlier 2026 cybersecurity stock rankings, highlighting Fortinet's exceptional performance and updating his recommendation based on recent financial and valuation metrics. He now identifies SentinelOne as the most promising cybersecurity stock for the rest of 2026, citing its superior revenue growth and improving profitability at a valuation comparable to Fortinet.

MAIN POINTS

• Fortinet was previously ranked as the top cybersecurity stock for 2026 and has since delivered over 100% returns. [0:00]
• Palo Alto Networks' revenue growth has accelerated due to a strategic shift offering free service periods to new customers switching from competitors. [2:02]
• All five companies—Fortinet, Palo Alto Networks, CrowdStrike, Rubrik, and SentinelOne—have demonstrated strong revenue growth, with Fortinet and CrowdStrike showing significant increases since 2021. [4:01]
• Fortinet maintains the highest operating profit margin in the industry, while Palo Alto Networks' margins have declined as revenue growth accelerated due to promotions. [5:00]
• SentinelOne, though currently the smallest and not yet profitable, has shown consistent improvement in operating margins and potential for future profitability as it scales. [7:01]
• With Fortinet and SentinelOne now trading at nearly identical forward price-to-earnings ratios, SentinelOne is favored for its stronger revenue growth and upside potential. [9:00]

DETAILED ANALYSIS

At the start of 2026, Fortinet was identified as the leading cybersecurity stock, a recommendation that has since yielded a return exceeding 100% year-to-date. This performance outpaced other sector leaders, with Palo Alto Networks rising 94%, CrowdStrike 70%, SentinelOne 21%, and Rubrik 14%. The sector's robust growth has been driven by heightened demand for cybersecurity solutions and strategic moves by major players.

Notably, Palo Alto Networks implemented a customer acquisition strategy offering free service periods to clients switching from competitors, resulting in a pronounced acceleration in revenue, now reaching $10.6 billion over the trailing twelve months. However, this growth has come at the expense of operating profit margins, which have declined as the company prioritized expanding its customer base through incentives.

In contrast, Fortinet has maintained industry-leading operating profit margins at 31%, more than four times higher than its closest peer, reflecting strong organic growth and operational efficiency. CrowdStrike and Rubrik, while demonstrating significant revenue growth, remain unprofitable, though Rubrik has shown progress in narrowing its losses. SentinelOne, the smallest by revenue, has consistently improved its operating margins and is viewed as having clear potential for profitability as it achieves greater scale.

Valuation comparisons reveal that Rubrik and CrowdStrike command the highest forward price-to-earnings ratios, reflecting investor expectations for rapid growth. Fortinet and SentinelOne now trade at nearly identical forward P/E multiples—51 and 52, respectively—eliminating the valuation advantage Fortinet previously held. Given SentinelOne's superior revenue growth trajectory and ongoing improvements in profitability, it is now considered the best positioned for future gains among its peers.

This updated assessment reflects the dynamic nature of the cybersecurity sector and the importance of balancing growth prospects with valuation.

LINKS

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