This Cybersecurity Stock Under $20 is Soaring 15% After Hours. Here’s Why.

Netskope (NTSK) is up 15% in after-hours trading on Wednesday, September 2, after delivering second-quarter fiscal 2027 results that decisively beat Wall Street expectations across every key metric. 

The cybersecurity company, which specializes in modern security and networking for cloud and AI environments, reported an adjusted loss of just 3 cents per share on revenue of $220.5 million, compared to analyst consensus estimates calling for a loss of 7 cents per share and revenue of approximately $214 million. 

The revenue figure represented a 29% year-over-year increase, while annual recurring revenue (ARR) grew 27% to $899 million, underscoring robust and durable customer demand. 

On a GAAP basis, Netskope posted a net loss of $110.8 million, or 27 cents per share, but the adjusted figures stripped out stock option expense and non-recurring costs to paint a far more favorable picture. Non-GAAP gross margin expanded to 77%, up from 75% in the year-ago quarter, and non-GAAP operating margin improved significantly to negative 9% from negative 20% a year earlier, signaling meaningful progress toward profitability.

Netskope Gains Traction with AI Security

Netskope's forward guidance reinforced the bullish narrative. For the fiscal third quarter, management projected revenue of $227 million to $229 million and an adjusted loss of 3 to 4 cents per share. Full-year revenue is expected in a range of $888 million to $892 million, with a full-year adjusted loss of 15 cents per share, suggesting the company sees a clear path to breakeven as it scales.

CEO Sanjay Beri attributed the strong performance to organic innovation and sustained demand for the company's Netskope One platform, which spans security, networking, analytics, and AI. 

“We are encouraged by early traction with our AI Security solutions, validating that Netskope sits right at the intersection of cloud, AI, networking and security and is becoming part of the essential, adaptive fabric for the modern enterprise to adopt AI safely,” said Beri in a company release.

This commentary aligns with broader cybersecurity sector trends, where AI-driven threats have been catalyzing accelerated enterprise spending on cyber defenses throughout 2026.

Where Netskope Stands in the Cybersecurity Space

Netskope's balance sheet remains solid, with $1.1 billion in cash, cash equivalents, and marketable securities at the end of the quarter, providing ample runway for continued investment. 

Cash usage in operations improved modestly year-over-year, with operating cash flow margin narrowing from negative 10% to negative 7%. Free cash flow remained negative at $29.8 million but is trending in a direction consistent with a high-growth SaaS company approaching scale.

Netskope's results arrive during a period of intense investor interest in cybersecurity, with peers like CrowdStrike (CRWD) recently posting record results driven by AI-related demand and Palo Alto Networks (PANW) confirming that AI is a durable tailwind for the sector. 

While Netskope trades at a much smaller market capitalization and stock price under $20, its growth trajectory and competitive positioning in cloud-native security suggest it could continue to attract investor attention as the AI security opportunity expands.

How to Trade a Netskope Earnings Gap

If the after-market surge in NTSK holds, it would be the stock’s biggest one-day move in years. 

For a look at how traders can approach a post-earnings gap, check out this video from day trading expert Kenny Glick to see how he tackled big moves on Dick’s (DKS) and Kohl’s (KSS).

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