5 Undervalued Cybersecurity Stocks to Research in 2026
Quick answer: the most interesting cybersecurity value candidates are not necessarily the stocks with the lowest share prices. For this 2026 watchlist, ApexTicker focuses on companies where recurring revenue, operating leverage, product positioning, or turnaround potential may be stronger than a simple headline valuation suggests.
This is a research screen, not a claim that each stock is definitively undervalued today. Valuation changes with share price. Before buying, compare the latest enterprise value, free cash flow, growth rate, dilution, and guidance with peers.
Freshness correction: CyberArk is no longer a standalone stock
An earlier version of this article included CyberArk (CYBR). Palo Alto Networks completed its acquisition of CyberArk on February 11, 2026, so CYBR is no longer an appropriate standalone 2026 stock pick. This update replaces it with Rapid7 (RPD) and refreshes the operating data for the full list.
How We Screen “Undervalued” Cybersecurity Stocks
We look for a mismatch between business progress and market expectations. The screen emphasizes: revenue or ARR growth, improving operating margins and cash generation, durable security demand, and a credible product focus. A stock can still be expensive after passing this screen, so live valuation must be checked separately.
1. SentinelOne NYSE: S
High-growth platform moving toward operating leverage
SentinelOne reported fiscal Q1 2027 revenue of $277 million, up 21% year over year, while ARR grew 23% to $1.163 billion. Non-GAAP operating margin improved to 4%. The value case is not “cheap software”; it is that continued ARR growth plus better operating leverage could narrow the gap between growth and profitability.
What supports the thesis
- Double-digit revenue and ARR growth.
- AI-native endpoint, cloud, data and identity positioning.
- Improving non-GAAP operating profitability.
Main risks
- Heavy competition from larger security platforms.
- GAAP losses and stock-based compensation still matter.
- Growth-stock valuation can compress quickly.
Primary source: SentinelOne Q1 FY2027 results
2. Tenable NASDAQ: TENB
Exposure management with improving profitability
Tenable's Q2 2026 revenue reached $268.5 million, up 8.6%. More importantly for a value-oriented thesis, GAAP operating margin improved to 4.6% and non-GAAP operating margin to 24.7%. The company also raised its full-year outlook.
Why it belongs on the screen: revenue growth is slower than some peers, but improving profitability and a high recurring-revenue mix can make the risk/reward more interesting if valuation does not already price in the improvement.
Primary source: Tenable Q2 2026 results
3. Varonis Systems NASDAQ: VRNS
Data and AI security with fast SaaS conversion
Varonis reported Q2 2026 total revenue of $180.0 million, up from $152.2 million a year earlier. SaaS revenue rose to $171.7 million, and total SaaS ARR reached $726 million, up 52%; excluding conversions, SaaS ARR growth was 25%.
Why it belongs on the screen: the subscription transition can obscure the underlying business trend. Investors should separate conversion-driven ARR growth from organic new demand and then compare that quality of growth with the current valuation.
Primary source: Varonis Q2 2026 results filed with the SEC
4. Qualys NASDAQ: QLYS
Profitable cybersecurity compounder
Qualys reported Q2 2026 revenue of $182.2 million, up 11%, with a 34% GAAP operating margin. Management raised full-year 2026 revenue guidance to $732–$738 million.
Why it belongs on the screen: Qualys offers a different profile from loss-making growth names: slower expansion, but strong margins and cash generation. The key valuation question is how much investors should pay for that durability.
Primary source: Qualys Q2 2026 results
5. Rapid7 NASDAQ: RPD
Turnaround candidate—the highest-risk pick
Rapid7's Q2 2026 revenue was $210.9 million, down 1.5%, and ARR was $824 million, down 2%. The company nevertheless reported GAAP operating income of $3.0 million and free cash flow of $31.9 million while narrowing its strategic focus around detection and response and exposure management.
Why it belongs on the screen: this is a turnaround thesis rather than a growth thesis. If stabilization and cash generation improve while revenue returns to growth, the rerating potential can be meaningful. If ARR keeps shrinking, the “cheap” valuation can remain a value trap.
Primary source: Rapid7 Q2 2026 results
2026 Comparison: What Each Stock Is Really Offering
| Company | Current operating signal | What to verify before buying | Risk |
|---|
| SentinelOne | 21% revenue growth; 23% ARR growth | Valuation vs path to durable GAAP profit | High |
| Tenable | 8.6% growth; margins improving | Whether operating leverage can outpace slower growth | Medium |
| Varonis | Strong SaaS growth during conversion | Organic SaaS growth excluding conversions | Medium/High |
| Qualys | 11% growth; 34% GAAP operating margin | Price paid for high profitability | Medium |
| Rapid7 | Revenue/ARR decline but positive cash flow | Evidence that the turnaround has stopped contraction | Very High |
How to Decide Whether a Cybersecurity Stock Is Actually Undervalued
Do not use this list as a buy signal. Pull the latest market capitalization and enterprise value, then compare EV/revenue, free-cash-flow yield, growth, gross margin, dilution, and forward guidance with direct peers. A lower multiple can reflect opportunity—or deteriorating fundamentals.
For the accounting side, use our fundamental stock analysis guide, balance-sheet guide, and free cash flow vs net income explainer. To understand how growth and valuation interact, see growth vs value investing.
Bottom Line
SentinelOne offers the cleanest growth story, Tenable and Qualys offer improving or already strong profitability, Varonis offers a SaaS-transition thesis, and Rapid7 is the contrarian turnaround. The right “undervalued” pick depends on the live valuation you pay—not just the company narrative.
Disclaimer: Educational research only. This is not investment advice or a recommendation to buy or sell any security.
Jaber Khalifa
Founder of ApexTicker. Jaber builds automated financial-data pipelines and market-analysis tools for independent investors.
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