Cybersecurity is becoming more important every year as more companies move their work online. In a recent CNBC interview, the CEO of CyberArk, Matt Cohen, said that cyber threats are getting worse, not better. He explained that both people and machines now have digital identities, and hackers are trying to break into those more often. Because of this, businesses need stronger tools to protect their systems. Even though the economy has some uncertainty and trade problems, many companies are still spending money on cybersecurity.
Right now, some cybersecurity stocks are trading much lower than what analysts think they’re worth. These companies may not be in the headlines, but they are growing and could bounce back as the need for digital safety increases. In this article, we highlight 13 most undervalued cybersecurity stocks to buy right now. With increased urgency around digital defenses and identity management, these companies may offer investors a timely mix of value and growth potential.
A cybersecurity expert monitoring the security of the company’s assets, emphasizing the importance of data protection.
Our Methodology
To compile the list of 13 undervalued cybersecurity stocks to buy now, we reviewed cybersecurity ETFs to compile a preliminary list of stocks. We then filtered for stocks with a forward P/E of less than the sector median of 23.73x. We then sorted the list in ascending order of the number of hedge fund holders as of Q1 2025.
Note: All data was recorded on August 14, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13 Most Undervalued Cybersecurity Stocks to Buy Now
13. NetScout Systems, Inc. (NASDAQ:NTCT)
Number of Hedge Fund Holders: 22
Forward P/E Ratio: 10.16x
NetScout Systems, Inc. (NASDAQ:NTCT) is one of the most undervalued cybersecurity stocks to buy now. NetScout Systems, Inc. (NASDAQ:NTCT) reported its Q1 Fiscal Year 2026 (ended June 30), earnings report on August 7. The company reported a revenue of $186.7 million for the quarter, a mild 7% increase on a year-over-year basis. However, product revenue grew 19.28% year-over-year, to $73 million. As of the end of the quarter, the company had a solid backlog of $30.9 million. The company’s service revenue remained flat at $113.8 million.
NetScout Systems, Inc. (NASDAQ:NTCT)’s net loss showed a drastic improvement to $6.6 million in Q1 FY2026, compared to the $463.3 million loss in the same quarter last year. The company’s full year FY 2026 revenue guidance remain in the range of $825 million to $865 million, which would represent a 0%-5% growth.
A few weeks back, the company announced a flurry of AI-backed improvements to its Arbor Edge Defense and DDoS (Distributed Denial of Service) Solutions, to recognize and mitigate threats in real time. This improvement leverages AI to automate defenses against the ever-sophisticated attacks. According to the company, this helps clients mitigate up to 80% of all DDoS attacks without the need for human analysis.
12. NICE Ltd (NASDAQ:NICE)
Number of Hedge Fund Holders: 23
Forward P/E Ratio: 11.96x
NICE Ltd (NASDAQ:NICE) is one of the most undervalued cybersecurity stocks to buy now. On July 28, DA Davidson initiated coverage on NICE Ltd (NASDAQ:NICE) with a Neutral rating and a price target of $195, implying over a 42% upside from the current price of $143.69. The firm’s initiation came after the Israeli company agreed to acquire Cognigy for $955 million.
Cognigy is a private company that provides enterprises with a platform that can help them build and manage AI-powered conversational agents, which help improve customer service and support. According to DA Davidson, the acquisition is a strategic step that could help NICE Ltd (NASDAQ:NICE), a global leader in AI-powered customer experience, further its position in the AI space, particularly in customer service and automation.
However, DA Davidson gave a caveat that the price Nice is paying for the acquisition is high based on the company’s current size. The price represents more than 10% of the company’s market cap. While DA Davidson thinks that the move has long-term benefits, it also believes the valuation is difficult to justify in the short term.
NICE Ltd (NASDAQ:NICE) offers a number of cybersecurity solutions, particularly focusing on financial crime. However, the company also provides customer experience management, AI-driven analytics, and workforce engagement.
