When searching for a new position to get in early on, a lack of Wall Street coverage and analyst excitement can be a good thing. After all, too much hype can quickly result in a stock becoming overvalued, leading to a potential loss. Moreover, smaller companies, while riskier, have more potential for long-term returns, as they have more room to grow. Nowhere is this more true than in the world of undiscovered cybersecurity stocks.
The cybersecurity industry has significant potential to grow as cyberattacks become more costly. For example, since 2023 the average cost of a data breach in the United States has been $9.48 million. Globally, the cost of a single data breach has become $4.45 million.
Thus, the potential for new and relatively undiscovered cybersecurity stocks to become more valuable is exceptionally high. Here are three such companies to keep an eye on in the coming years.
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AvePoint (AVPT)
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Highly specialized and relatively small, AvePoint (NASDAQ:AVPT) is a software company focused on cloud-based solutions for managing data in Microsoft (NASDAQ:MSFT) 365 environments. Its offerings directly assist businesses in safely maintaining their corporate data in cloud storage. AvePoint’s technology achieves this management prowess through seamlessly integrating with Microsoft 365 platforms like SharePoint and OneDrive.
The company is also an expert at backing up and recovering data to support business continuity and prevent data corruption. It then offers these data security services and tools to a broad range of organizational levels. From small businesses to large enterprises, AVPT can tailor its offerings to almost any customer size.
This makes AVPT incredibly attractive as a data management and security provider, as it does not focus on a “one size fits all” approach to its services. As such, AVPT might be one of the undiscovered cybersecurity stocks to watch before Wall Street takes notice.
Secureworks (SCWX)
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One of the smaller undiscovered cybersecurity stocks trading right now, Secureworks (NASDAQ:SCWX), has focused heavily on diversifying its service portfolio. More specifically, the company offers a range of services designed to maintain and protect organizational information technology infrastructure. Among these are security services such as threat detection, incident response and security awareness.
Currently, the company’s target market is mid-sized businesses and distributed enterprises that may not have necessary the resources or expertise to develop custom in-house security teams. Because the cybersecurity market is expected to continue growing rapidly due to the increasing threat landscape, Secureworks’ approach to helping businesses without the resources to help themselves could become exceptionally lucrative.
Finally, the company is also continuously innovating as it braces for a paradigm shift in the cybersecurity industry with more and more providers shifting to cloud-based services. Thus, it’s worth keeping SCWX in mind when considering which cybersecurity stocks to add to your portfolio.
Telos (TLS)
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Speaking of the increasing demand for cloud-based cybersecurity solutions, Telos (NASDAQ:TLS) stands in a prime position to benefit from the trend. This is because Telos started with a focus on cloud-based security solutions designed to protect critical infrastructure and high-value data.
As more and more tech companies and businesses move their computing and data storage infrastructure to offsite cloud data centers, Telos’ list of potential customers will continue to grow. Moreover, the company has already begun offering cyber-threat intelligence services for analyzing an organization’s data structure and habits to identify potential attacks.
With its technological edge and overall focus on threat detection and prevention, Telos could find its value growing rapidly in the coming years. That’s because it already serves a broad range of organizations, from government agencies to large corporations. Thus, Telos’ relatively quiet nature among undiscovered cybersecurity stocks makes it worth following and even buying into.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.
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