This Top Cybersecurity Stock Is Rising on a Facial Recognition Catalyst

The top cybersecurity stocks should be on your mind right now.

This industry expects four-year growth of nearly $100 billion, and one growth stock is poised to ride those tailwinds.

Unfortunately, it's because cyber threats are ramping up, and this one is literally staring you in the face.

If you were on social media last week, you may have learned about an app that lets you see what you'll look like when you're older.

But you also might have learned that FaceApp wasn't all in good fun. The program, powered by Russian AI, did more than make a funny picture.

Several complaints about FaceApp's user agreement surfaced online. People said it empowered the app to upload a user's entire photo library, and other data, beyond just the picture intended for the filter.

Further, they said the privacy policy's broad language allows the app's Russian developer, Wireless Lab, to use the data however it likes, or sell it to anyone, with no legal repercussions.

Still, celebrities set off a wave of social media posts last week. They showed photos of themselves significantly "aged," followed by millions of other social media users around the world.

Here's one of TV chef Gordon Ramsey:

The company has responded to several of these privacy claims, dismissing them as either overstated or inaccurate. But despite FaceApp claiming it doesn't sell your data to third parties, using the app can still make your data vulnerable in a different way.

In fact, the biggest overstatement here could be that FaceApp is the sole danger.

This is bigger than FaceApp.

It's part of why one of our top cybersecurity stocks to buy has increased profits 198% over the last three years, with no signs of slowing down.

We'll show you why it's poised to grab a big chunk of that $100 billion. But first, here's why the cybersecurity industry is getting less and less funny.

Valuing Your Face

In today's world, the face is a critical piece of personally identifiable information.

In other words, it has monetary value. And that's what allows companies like Facebook (NASDAQ: FB) and their affiliates to profit from it.

Facial recognition cameras can be found at airports. Facial databases are being filled by government cameras on public streets. And the same kind of data is transmitted whenever you open your iPhone using FaceID, or when you post a selfie on Snapchat.

There's a danger to having such valuable information scattered in so many different places on the cloud. Many don't realize the cloud can be a target of cybercrime.

But if you're like most people, and your photos have ever been online, your face is probably floating somewhere in cyberspace.

That means we're all relying on the cybersecurity measures of banks, retailers, tech giants and governments to protect it.

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A face in the wrong hands could mean fraudulent access to your home or bank account. It could enable illegal passage through a port of entry or some other secured space.

And unlike a password, a face is much harder to "reset" when compromised.

But hackers don't even need a face or a fingerprint, per se.

According to Mike Muscatel, Senior Information Security Manager for Snyder's-Lance, all they need is the data behind it.

"We are giving away too much biometric data," Muscatel said. "[the bad guy] doesn't need your actual fingerprint, just the data that represents your fingerprint."

It's likewise with your face, voice, and any other data you send through your mobile device. There are people out there right now - cybercriminals - actively trying to steal that information.

Still, despite a general mistrust in large data handling firms, there is good news here.

The widespread notion is that companies toss your data to the highest bidder without batting an eye.

This might have been true at one point. But you'll be pleased to know that's changing.

Now, it's actually in a corporation's (though maybe not FaceApp's) best interest to handle your information with care.

And here's why...

Greater Cybersecurity Awareness

Though 100 million people have given the rights to their faces over to a little-known Russian app developer, it's also put a bigger spotlight on the problems of cybersecurity.

Whether you're a marketer, a hacker, or are just trying to protect your identity, there's a growing awareness of the power - and danger - of information technology.

People are more concerned about the security of their information than ever. So it's more and more in the interest of the companies harvesting that data to keep it out of the wrong hands.

"Corporate America should get ready," said Robert Herjavec, Angel Investor and CEO of Herjavec Group. "Cybersecurity regulations will soon be coming to the United States - and that's actually a good thing."

Herjavec told Forbes, "We're in a very challenging time where warfare is being fought in cyberspace and the threats aren't going to slow down anytime soon. It's a great industry to be a part of, but at the same time, the diligence required by individuals, corporations, and governments has never been higher."

According to Cybersecurity Ventures, damages from cybercrime will reach $6 trillion by 2021.

Big companies that manage large amounts of data are scrambling for solutions to keep their customers' passwords, locations, social security numbers, fingerprints, and faces safe from hackers.

That's why Money Morning Defense and Tech Specialist Michael Robinson expects that by 2021, the cybersecurity industry will have seen 68% growth over just four years, from $137.8 billion to $231.9 billion.

Count that as $94.1 billion growth for the cybersecurity industry. And we know a cybersecurity stock ready to jump right with it.

This stock has grown only 21% since January. But it scores a perfect 4.45 on our proprietary Money Morning Stock VQScore™ system.

Some analysts even predict this stock will have seen 60% growth by the end of the year.

But a perfect VQScore, alongside massive industry growth, means its earnings are on pace to soar much higher...

The Top Cybersecurity Stock to Buy Right Now

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Qualys Inc. (NASDAQ: QLYS) is a cloud security company founded in 1999.

The cloud is where all our faces, and plenty of other vital information, is stored.

Qualys works to keep this secure, and it does this for 11,000 corporate customers in 130 countries.

According to the company website, its customers include "a majority on the Forbes Global 100," which ranks companies by sales, profits, assets, and market value.

It provides app-based "vulnerability management" solutions, which means its software can identify weaknesses in an information system and inform the proper course of action to eliminate it.

It performs more than 3 billion IP scans/audits per year, which it says amounts to about 1 trillion vulnerabilities discovered in that time.

One thing that separates Qualys from its competition is that, at the dawn of the millennium, it was one of the first companies to offer vulnerability management services.

Today, it's taking the lead again in providing security through a cloud platform.

According to, 96% of organizations use the cloud in one way or another, and the same trend applies for cybersecurity solutions.

That's why Qualys' revenue went up 20% last year, jumping from $230.82 million to $278.89 million. With so many businesses migrating their information to the cloud, there is greater need for cloud-oriented security.

The same is reflected in this company's net income. It almost tripled in the last three years. In 2016, it was $19.2 million, but it grew to $57.3 million by the end of 2018. That's a 198% profit increase.

And this year, Qualys expects to grow even more, with 16% year-over-year revenue growth reported in its Q1 2019 earnings.

The stock currently trades at $88.56, and analysts expect it to grow 26% over the next year, to $111.

But with the cybersecurity industry growing, the widespread adoption of cloud security, and this stock's perfect 4.45 VQScore, that's likely a modest prediction.

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About the Author

Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.

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