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Reasons Why You Should Get Rid of CyberArk (CYBR) Stock Now
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If you are still holding on to shares of CyberArk Software Ltd. (CYBR - Free Report) in your portfolio, it is time you dump them as chances of favorable returns in the near term appear bleak.
Dropping CyberArk can maximize investor’s portfolio returns as it has witnessed a significant price decline in the past one year, and has seen negative earnings estimate revisions for the current quarter and the year. Further, the company’s Zacks Rank #4 (Sell) only reflects its innate weakness.
CyberArk has lost 26.8% of its value year over year versus the 11.3% growth of its industry. The stock carries a VGM Score of D.
Let’s delve deeper and find out what is taking this company down.
Why CyberArk Should be Avoided
CyberArk is an Israeli company that specializes in protecting accounts from cyber-attacks. The company offers several products that protect passwords, close loopholes in the security system, and secure cloud-based assets.
For the full year 2017, we have seen eight estimates moving south in the past 30 days. This trend has caused the consensus estimate to trend downward, going from $1.09 per share a month ago to its current level of $1.05.
Additionally, for the current quarter, CyberArk has seen 11 downward estimate revisions against no revisions in the opposite direction, dragging the consensus estimate down to 19 cents per share from 25 cents in the past 30 days.
The company’s non-GAAP earnings per share for second-quarter 2017 came in at 21 cents, which declined 27.6% on a year-over-year basis. On an adjusted basis too, earnings per share (excluding amortization of intangible assets and other one-time items but including stock-based compensation) on a proportionate tax basis came in at 11 cents per share, registering a plunge of 47.6% from the year-ago quarter’s earnings of 21 cents.
The year-over-year plunged in earnings on both fronts, i.e. non-GAAP and adjusted, was mainly due to the lower-than-expected sales growth and elevated operating expenses.
Though, CyberArk’s revenues increased just 14.1% year over year to $57.5 million, it was the slowest since it got listed in 2014. The company’s revenues also fell short of management’s guided range of $61-$62 million (mid-point $61.5 million), as well as the Zacks Consensus Estimate of $58 million, mainly due to weak performance in the Europe, Middle East and Africa (EMEA) region resulting from some sales execution problem.
The company also provided sluggish revenue guidance for the third quarter and full-year 2017.
For the third quarter, CyberArk expects revenues in the range of $62-$63 million (mid-point $62.5 million), representing 13-15% year-over-year growth. The mid-point of the guided range, however, is below the Zacks Consensus Estimate of $63.26 million.
For the year, the company lowered outlook. CyberArk now anticipates revenues in the band of $253-$256 million (mid-point $254.5 million), representing 17-18% year-over-year growth, down from the previous range of $268.5–$271.5 million (mid-point $270 million). The guided range at the mid-point is lower than the Zacks Consensus Estimate of $254.72 million.
Similarly, non-GAAP earnings for 2017 are now expected to be between $1.02 and $1.06 per share, down from the earlier guided range of $1.18-$1.22. Its outlook for the third quarter as well as full year indicates that it will remain around 15%. This makes us slightly cautious about its future prospects.
Intensifying competition from peers such as CA Inc. (CA - Free Report) and Microsoft Corp. (MSFT - Free Report) , and an uncertain macroeconomic environment add to woes.
So, it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t intend to wait for a long time.
Applied Materials has a long-term expected earnings growth rate of 16.6%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Reasons Why You Should Get Rid of CyberArk (CYBR) Stock Now
If you are still holding on to shares of CyberArk Software Ltd. (CYBR - Free Report) in your portfolio, it is time you dump them as chances of favorable returns in the near term appear bleak.
Dropping CyberArk can maximize investor’s portfolio returns as it has witnessed a significant price decline in the past one year, and has seen negative earnings estimate revisions for the current quarter and the year. Further, the company’s Zacks Rank #4 (Sell) only reflects its innate weakness.
CyberArk has lost 26.8% of its value year over year versus the 11.3% growth of its industry. The stock carries a VGM Score of D.
Let’s delve deeper and find out what is taking this company down.
Why CyberArk Should be Avoided
CyberArk is an Israeli company that specializes in protecting accounts from cyber-attacks. The company offers several products that protect passwords, close loopholes in the security system, and secure cloud-based assets.
For the full year 2017, we have seen eight estimates moving south in the past 30 days. This trend has caused the consensus estimate to trend downward, going from $1.09 per share a month ago to its current level of $1.05.
Additionally, for the current quarter, CyberArk has seen 11 downward estimate revisions against no revisions in the opposite direction, dragging the consensus estimate down to 19 cents per share from 25 cents in the past 30 days.
The company’s non-GAAP earnings per share for second-quarter 2017 came in at 21 cents, which declined 27.6% on a year-over-year basis. On an adjusted basis too, earnings per share (excluding amortization of intangible assets and other one-time items but including stock-based compensation) on a proportionate tax basis came in at 11 cents per share, registering a plunge of 47.6% from the year-ago quarter’s earnings of 21 cents.
The year-over-year plunged in earnings on both fronts, i.e. non-GAAP and adjusted, was mainly due to the lower-than-expected sales growth and elevated operating expenses.
Though, CyberArk’s revenues increased just 14.1% year over year to $57.5 million, it was the slowest since it got listed in 2014. The company’s revenues also fell short of management’s guided range of $61-$62 million (mid-point $61.5 million), as well as the Zacks Consensus Estimate of $58 million, mainly due to weak performance in the Europe, Middle East and Africa (EMEA) region resulting from some sales execution problem.
The company also provided sluggish revenue guidance for the third quarter and full-year 2017.
For the third quarter, CyberArk expects revenues in the range of $62-$63 million (mid-point $62.5 million), representing 13-15% year-over-year growth. The mid-point of the guided range, however, is below the Zacks Consensus Estimate of $63.26 million.
For the year, the company lowered outlook. CyberArk now anticipates revenues in the band of $253-$256 million (mid-point $254.5 million), representing 17-18% year-over-year growth, down from the previous range of $268.5–$271.5 million (mid-point $270 million). The guided range at the mid-point is lower than the Zacks Consensus Estimate of $254.72 million.
Similarly, non-GAAP earnings for 2017 are now expected to be between $1.02 and $1.06 per share, down from the earlier guided range of $1.18-$1.22. Its outlook for the third quarter as well as full year indicates that it will remain around 15%. This makes us slightly cautious about its future prospects.
Intensifying competition from peers such as CA Inc. (CA - Free Report) and Microsoft Corp. (MSFT - Free Report) , and an uncertain macroeconomic environment add to woes.
So, it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t intend to wait for a long time.
Stocks to Consider
A better-ranked stock in the technology sector is Applied Materials, Inc. (AMAT - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Materials has a long-term expected earnings growth rate of 16.6%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>