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CyberArk Buys Vaultive to Enrich Cloud Security Solutions

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CyberArk Software Ltd. (CYBR - Free Report) recently announced that it has acquired certain assets of a privately-held cloud security provider named Vaultive, Inc. The terms of the deal were kept under wraps.

The company’s flagship product, Privileged Account Security Solution protects organizational privileged accounts from cyber-attacks across on-premise, cloud and hybrid cloud environments.

The integration of Vaultive is expected to enrich the abilities of the solution to address the needs of the respective users as well as administrators of Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) projects.

Per the company, “the cloud-native and mobile experience” delivered by Vaultive is anticipated to be beneficial for the enhancement of CyberArk’s offered solutions. This in turn will add to the top line going ahead, leading to better financials.

Per a recent report by Gartner, the cloud based security services market is anticipated to reach $8.9 billion by 2020 from $5.9 billion in 2017.  We believe CyberArk is poised to make the most of the growth opportunity riding on its solid portfolio.

We believe that CyberArk’s strategy of growing through acquisitions is encouraging and is enabling it to meet the varied requirements of clients. Notably, in the last three years, the company made three important acquisitions – Conjur, Cybertinel and Viewfinity. These acquisitions have expanded CyberArk’s capabilities, thereby helping it to gain more customers.

Additionally, the company’s C3 technology alliance program involving partnerships with the likes of Proofpoint , Qualys (QLYS - Free Report) and ServiceNow (NOW - Free Report)   bode well. These initiatives have been paying off as reflected in the company’s revenue growth in the last few quarters.

Nonetheless, we are apprehensive about increasing operating expenses pertaining to initiatives related to enriching its solutions suite as well as enhancing its sales competency. Though these investments will have benefits over the long term, we anticipate these to be a drag on CyberArk’s profitability and the bottom line in the near term. Notably, the company’s fourth-quarter 2017 non-GAAP operating margin declined to 24.5% from 30.2%, primarily due to higher operating expenses as a percentage of revenues.

Currently, CyberArk has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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