The global cloud security software market is expanding rapidly due to higher investments from organizations in cloud security solutions to protect sensitive data. The global cloud security software market is expected to grow at a CAGR of 17.4% by 2033.
North America dominates the application security market due to its advanced technological infrastructure, widespread digital transformation, and the presence of numerous leading cybersecurity firms. A high volume of cyber threats, stringent regulatory compliance demands, and significant industry investments in security solutions further drive the market growth.
Against this backdrop, let’s compare two established security stocks to analyze which stock is a safer bet: Clear Secure, Inc. (YOU) and SentinelOne, Inc. (S).
The Case for Clear Secure, Inc. Stock
Valued at $3.14 billion by market cap, Clear Secure, Inc. (YOU) operates a secure identity platform under the CLEAR brand name, primarily in the United States. Its secure identity platform is a multi-layered infrastructure consisting of a front-end, including enrollment, verification, linking, and a back-end.
On February 7, 2025, YOU launched its identity verification technology at Portland International Airport (PDX), bringing frictionless and predictable travel experiences to Oregon. YOU’s launch at PDX is expected to create 53 jobs and generate over $3 million annually in local economic impact.
YOU has gained 26.6% over the past nine months to close the last trading session at $22.54.
In terms of the trailing-12-month gross profit margin, YOU’s 62.97% is 23.6% higher than the 50.93% industry average. Likewise, its 0.77x trailing-12-month asset turnover ratio is 29.3% higher than the industry average of 0.59x.
In the fiscal third quarter that ended on September 30, 2024, YOU’s revenue increased 23.7% year-over-year and amounted to $198.42 million. The company’s net income grew 52.9% from the prior-year quarter to $23.47 million. Its net income per share grew 47.1% year-over-year to $0.25.
Street expects YOU’s revenue for the fiscal fourth quarter (ended December 2024) to increase 18.3% year-over-year to $202.21 million. Its EPS is expected to grow 72.9% year-over-year to 0.29. In addition, it surpassed the revenue estimates in each of the trailing four quarters, which is promising.
YOU’s POWR Ratings reflect bright prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
YOU is ranked #5 out of 20 stocks in the Software - Security industry. It has an A grade for Value and a B for Growth and Quality. To see YOU’s Momentum, Sentiment, Momentum, and Stability ratings, click here.
The Case for SentinelOne, Inc. Stock
Valued at $8 billion by market cap, SentinelOne, Inc. (S) operates as a cybersecurity provider in the United States and internationally. Its Singularity Platform delivers artificial intelligence-powered autonomous threat prevention, detection, and response capabilities across an organization's endpoints and cloud workloads and identifies credentials that enable seamless and autonomous protection against a spectrum of cyber threats.
Share of S has declined 9.4% over the past three months to close the last trading session at $24.80.
In terms of the trailing-12-month EBIT margin, S’ negative 42.33% is lower than the 5.43% industry average. Its negative 37.61% trailing-12-month levered net income margin is lower than the industry average of 4.10%.
S’s revenue for the third quarter that ended October 31, 2024, was reported at $210.65 million. However, the company reported a net loss of $78.36 million and $0.25 per share.
Street expects S’ revenue for the fourth quarter ended January 2025 to increase 27.6% year-over-year to $222.33 million. Moreover, the company’s EPS for the same quarter is expected to be $0.01.
S’ bleak fundamentals are reflected in its POWR Ratings. The stock has an overall D rating, translating to a Sell in our proprietary rating system.
S has a D grade in Value, Stability, Sentiment, and Quality. It is ranked #17 in the same industry.
Click here for the additional POWR Ratings for S (Growth and Momentum).
Clear Secure vs. SentinelOne: Which Security Stock Is a Safer Bet?
The global cloud security software market is expanding rapidly due to higher investments from organizations in cloud security solutions to protect sensitive data. Key driving factors for the market include the rise of DevOps, increasing multi-cloud environments, and the integration of AI and ML technologies.
Leading security companies, such as YOU and S, stand to capitalize on the optimistic industry outlook. However, YOU’s higher profitability and promising near-term outlook favor it as the better stock pick.
Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Software - Security industry here.
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S shares were trading at $24.80 per share on Monday afternoon, down $0.17 (-0.68%). Year-to-date, S has gained 11.71%, versus a 4.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
Clear Secure vs. SentinelOne: Which Security Stock Is a Safer Bet? StockNews.com
