CyberArk stock among potential beneficiaries of Microsoft security flaws

Investing.com - CyberArk Software (ETR:SOWGn) Ltd (NASDAQ:CYBR) and several other cybersecurity firms could benefit from recently exploited Microsoft (NASDAQ:MSFT) security vulnerabilities, according to TD Cowen analyst Shaul Eyal. The cybersecurity sector has shown strong momentum, with industry leader Fortinet (NASDAQ:FTNT) delivering an impressive 80% return over the past year.

On July 20, the Washington Post reported that hackers had exploited a security flaw in Microsoft SharePoint Servers to target U.S. federal and state agencies, universities, energy companies, and an Asian telecommunications company over the past few days. The U.S. government, along with partners in Canada and Australia, is investigating the compromise. According to InvestingPro, Fortinet’s strong financial health score and robust gross profit margins of 81% position it well to capitalize on increased cybersecurity demand.

Microsoft has not yet issued a patch for the vulnerability, while incident response teams from Palo Alto Networks (NASDAQ:PANW) and CrowdStrike (NASDAQ:CRWD) have acknowledged the attacks, according to the report.

TD Cowen identified several potential beneficiaries from this security incident, including CyberArk, Okta (NASDAQ:OKTA), and SailPoint for their complex identity solutions, and Varonis Systems (NASDAQ:VRNS) for advanced data risk assessment capabilities.

Additional companies that might see increased demand include Palo Alto Networks and CrowdStrike for incident response, while Check Point Software (NASDAQ:CHKP), Fortinet (NASDAQ:FTNT), Zscaler (NASDAQ:ZS), Cloudflare (NYSE:NET), SentinelOne (NYSE:S), and Tenable (NASDAQ:TENB) could benefit from their hybrid platforms and vulnerability management capabilities.

In other recent news, Fortinet’s first-quarter 2025 financial results have drawn varied reactions from analysts and investors. The company reported robust product sales that exceeded FactSet consensus estimates in revenue, billings, free cash flow, and operating margins. However, the slower growth in subscription revenue has led to a cautious stance from analysts, despite the company reaffirming its full-year revenue forecast and slightly increasing its operating margin outlook. Stifel adjusted its price target for Fortinet to $95 from $115, maintaining a Hold rating due to concerns about sales-force uncertainty and higher-than-expected customer churn. Meanwhile, Cantor Fitzgerald maintained a Neutral rating, raising its price target to $110, citing improved trends and a balanced outlook. KeyBanc Capital Markets kept an Overweight rating with a $115 target, noting a positive outlook despite some concerns about Fortinet’s go-to-market team turnover. Additionally, Fortinet announced enhancements to its security offerings, including the FortiMail Workspace Security suite and upgrades to its FortiDLP solution, addressing AI-enabled cybercrime threats. These developments reflect Fortinet’s ongoing efforts to adapt to the evolving cybersecurity landscape and maintain its market position.

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