It’s not too late

[u/kool_mandate]

My thesis is it’s not too late to buy cybersecurity stocks.

The number one highest performing factors in the stock market is momentum.

After the recent shake out due to AI fears, it looks to me like the response from the cybersecurity group is like it’s about to be swept up in the momentum trade.

I sold 6 naked puts on RBRK after someone brought it to my attention in my last post. I sold 2 naked NET puts and a naked CRWD put. I also have long shares on CRWD, NET and RBRK.

I mentioned PANW and ZS in my last post. I have no exposure right now, but I’m very bullish on both.

AI is a major usage tailwind for most stocks in this group. >80% of enterprise breaches aren’t even malware based so Claude provides no real displacement of use-case. Global conflict is also a tailwind, as is the fast growing cybersecurity TAM.

I just installed zero-trust from NET and instantly realized the value proposition. I used to be a Crowd Strike customer; one thing people don’t realize, is that it’s not about just stopping breaches, it’s that they are a partner in helping with crisis response if a breach actually does occur . Their network effect is such an asset, as JB puts it “you’d have to be insane to be a CRWD customer and go look for another vendor to save on the cybersecurity budget” This is evidenced in their ARR.

Lastly, I will add, if you are still valuing cybersecurity stocks on P/S , or even worse , P/E, and concluding the valuation is too high.. I highly suggest looking at other metrics, such as CFO CAGR, TAM CAGR, EV/ARR, LTV:CAC , FCF yield, ect.

Maybe this comment will age as well as the wine I tried to make in white-collar jail, but from my perspective, there is no group of stocks that’s a better buy at the specific current moment , imo. All bullish factors are aligned and the market is only starting to pile in.