We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CyberArk Software ((CYBR - Free Report) ) is back in the upper deck of the Zacks Rank after reporting another stunning beat and raise quarter last week.
With its 72% EPS beat for Q4, the mid-cap leader in end-to-end identity security and continuous cyber threat detection has now posted four consecutive quarters averaging a positive surprise of 76%.
Following last week's 18.5% surge in CYBR shares, the company has now entered the big-cap arena with a market capitalization of $11.5 billion.
And it will likely remain there as the company's outlook keeps pushing higher for both sales and profits, forcing Wall Street analysts to keep raising their estimates. You can get all the details on their growth and guidance in this article...
While it's likely that not all of the analyst upward revisions have yet to be submitted to the Zacks Rank quantitative weighting algorithm since last Thursday's report (as I write on Monday morning), the current consensus projections are making growth investors salivate as CyberArk is able to leverage its recurring revenues, subscriptions, and margins into higher realms of profitability...
Estimates as of 2/10/24
2024 Revenue: +23% to $926M 2025 Revenue: +21.5% to $1.13B
The link above is to my Zacks Confidential special report in October where I recommended buying shares of CYBR under $170. I also suggested buying CrowdStrike ((CRWD - Free Report) ), Okta ((OKTA - Free Report) ), and Datadog ((DDOG - Free Report) ).
More on the rationale for loading up with these cyber-security winners in a moment. First, let's review part of the CYBR growth story...
In the fourth quarter of 2023, the Identity Security solution provider’s reported revenues increased 32% year over year to $223.1 million and surpassed the consensus mark of $209.7 million. Markedly, more than 90% of quarterly revenues were recurring in nature, which surged 41% year over year to $201.5 million.
Annual Recurring Revenues (“ARR”) increased 36% to $774 million. The subscription portion, which accounted for 75% of the total ARR, soared 60% year over year to $582 million. This upside was primarily driven by a record number of software-as-a-service solution bookings and the strong demand for on-premise subscription offerings.
In my State of Threat: Cyber Crime 3.0 report, I wrote this...
With more big hacks and data breaches in the past few months, including MGM, 23andMe, and Flagstar Bank of Michigan -- their third since 2021 -- it’s becoming clear that a permanent state of ever-sophisticated threats exist for companies of all sizes.
We may have naively thought at some point in the past few years that cybersecurity companies, armed with big technology, bigger enterprise customer budgets, and highly-skilled people, would eventually close the gaps in corporate defenses.
But that dream has faded into a much more sober realization. Cyber crime is now one of the most advanced organized criminal ventures on the planet.
From state-sanctioned hacking, theft, and espionage to the incredible digital reach of skilled, armed bad actors across the globe, the lure of endless power and riches compares to any revolution in human history -- including the great Age of Exploration in the 16th to 18th centuries.
Note: I just read SpaceX engineer Andrew Rader’s book Beyond the Known for the second time and he knows his seafaring history as well as anyone. Highly recommend it.
But it gets worse. Just as we come to grips with the bad guys always being one step ahead of our latest data defenses, a new weapon has been presented to them that will intensify the war exponentially.
That weapon, of course, is Artificial Intelligence (AI). As much as I praise the growth and advancement that AI is bringing to industry, science, and society, we can easily see it is a double-edged sword when hidden forces can manipulate and destroy from a safe distance in their cyber bunkers.
(end of my Zacks Confidential special report excerpt from October)
To see the full detailed report with expert analysis on cybercrime scope, projections, and costs, just go to State of Threat.
If you don't have a subscription to Zacks Confidential -- where one of a dozen analysts writes a unique research report on a particular industry, sector, or economy-wide growth trend every Monday -- it is by far one of the best deals in investment analysis anywhere at under $100 per year.
Last time I checked it was still only $59 a year for 52 fresh, proprietary reports. And you get access to all the archives going back several years. Whatever the current price, you can get a 30-day trial for a buck and see for yourself if you find value in our research and stock picks.
Why Did I Recommend 4 Cyber Stocks in October?
I think you get a rough idea from my Zacks Confidential excerpt above that I slowly become aware last summer that the threat landscape had become obscenely sophisticated and sinister, like trying to fight Skynet without help from the Terminator.
So I wanted to go all-in on the best defenders I could find -- since none of them can do the job alone and most enterprises use several of them, just like any SaaS subscription.
Redundancy is essential for security, as any military or IT leader will tell you.
Here were my October rationales for picking CyberArk, CrowdStrike, Okta, and Datadog...
CyberArk Software (CYBR - Free Report) : This $6.7 billion veteran provider of enterprise security is growing sales this year and next at 24% to $900 million. I think this Zacks #2 Rank is undervalued and so does the team at Piper Sandler who has a $200 PT on shares.
Headquartered in Israel, CyberArk was founded in 1999. The company is a vital security partner to more than 5,400 global businesses, which include over 50% of the Fortune 500 and more than 35% of the Global 2000 companies.
CrowdStrike (CRWD - Free Report) : This $44 billion leader in “edge” security for mobile, IoT, and government / military applications has been surging to new highs since their August 31 earnings report. As many employees and senior management continue to work from home and remotely, the threat vulnerabilities are multiplied outside of enterprise firewalls. CrowdStrike's Zero Trust solution is intended to prevent breaches in real time on any identity, endpoint, or remote workload.
This Zacks #2 Rank is more expensive given the recent stock move, but with 35% topline growth this year -- and next year projected to tag $4 billion with another 28% advance -- it's going to remain on the top list for growth investors. It doesn’t hurt that profits are following with an 83% jump to EPS of $2.82. And these are the guys, led by founder George Kurtz, who have deep experience in Europe and Asia and are watching every move that Russia and China make.
Okta (OKTA - Free Report) : A $14 billion leader in identity security, trying to prevent human credential breaches as happened with MGM. Okta was not to blame for that breach, and now they have more intel about where to target defenses to prevent further identity breaches. With 19% sales growth this year and 14% projected next year to cross $2.5 billion, the stock is a relative bargain trading under 6 times sales.
They have also become quickly profitable with profits surging 3,000% this year and still looking at potential 28% growth next year to $1.50 EPS. I have to explore the extent of their R&D with biometrics, but I have some sources telling me to be optimistic this is a field they will also lead in.
Datadog (DDOG - Free Report) : Here’s what I wrote when I bought this stock for my TAZR Trader group last week (early October)...
TAZR Portfolio is buying a starter position in Datadog (DDOG - Free Report) between $85 and $90. We would add to this Zacks #1 Rank on any drop after earnings 11/2.
While DDOG is largely a data monitoring and analytics platform, Piper Sandler recently made it one of their top 5 cybersecurity picks as an end-to-end observability and cloud security platform. The Piper team has a price target for DDOG shares at $115, implying over 25% potential upside.
Data is the gold of this new digital age and we need look no further than the recent acquisition of Splunk by Cisco to see what enterprises are willing to invest to stay ahead.
There's more intel on both DDOG and CYBR in the full Zacks Confidential report State of Threat.
And here's how the 4 picks have done since October 17 through last Friday...
Image: Bigstock
Bull of the Day: CyberArk Software (CYBR)
CyberArk Software ((CYBR - Free Report) ) is back in the upper deck of the Zacks Rank after reporting another stunning beat and raise quarter last week.
With its 72% EPS beat for Q4, the mid-cap leader in end-to-end identity security and continuous cyber threat detection has now posted four consecutive quarters averaging a positive surprise of 76%.
Following last week's 18.5% surge in CYBR shares, the company has now entered the big-cap arena with a market capitalization of $11.5 billion.
And it will likely remain there as the company's outlook keeps pushing higher for both sales and profits, forcing Wall Street analysts to keep raising their estimates. You can get all the details on their growth and guidance in this article...
CyberArk (CYBR - Free Report) Soars 8% as Q4 Earnings & Sales Crush Estimates
While it's likely that not all of the analyst upward revisions have yet to be submitted to the Zacks Rank quantitative weighting algorithm since last Thursday's report (as I write on Monday morning), the current consensus projections are making growth investors salivate as CyberArk is able to leverage its recurring revenues, subscriptions, and margins into higher realms of profitability...
Estimates as of 2/10/24
2024 Revenue: +23% to $926M
2025 Revenue: +21.5% to $1.13B
2024 EPS: +55% to $1.74
2025 EPS: +92.5% to $3.35
State of Threat: Cyber Crime 3.0
The link above is to my Zacks Confidential special report in October where I recommended buying shares of CYBR under $170. I also suggested buying CrowdStrike ((CRWD - Free Report) ), Okta ((OKTA - Free Report) ), and Datadog ((DDOG - Free Report) ).
More on the rationale for loading up with these cyber-security winners in a moment. First, let's review part of the CYBR growth story...
In the fourth quarter of 2023, the Identity Security solution provider’s reported revenues increased 32% year over year to $223.1 million and surpassed the consensus mark of $209.7 million. Markedly, more than 90% of quarterly revenues were recurring in nature, which surged 41% year over year to $201.5 million.
Annual Recurring Revenues (“ARR”) increased 36% to $774 million. The subscription portion, which accounted for 75% of the total ARR, soared 60% year over year to $582 million. This upside was primarily driven by a record number of software-as-a-service solution bookings and the strong demand for on-premise subscription offerings.
In my State of Threat: Cyber Crime 3.0 report, I wrote this...
With more big hacks and data breaches in the past few months, including MGM, 23andMe, and Flagstar Bank of Michigan -- their third since 2021 -- it’s becoming clear that a permanent state of ever-sophisticated threats exist for companies of all sizes.
We may have naively thought at some point in the past few years that cybersecurity companies, armed with big technology, bigger enterprise customer budgets, and highly-skilled people, would eventually close the gaps in corporate defenses.
But that dream has faded into a much more sober realization. Cyber crime is now one of the most advanced organized criminal ventures on the planet.
From state-sanctioned hacking, theft, and espionage to the incredible digital reach of skilled, armed bad actors across the globe, the lure of endless power and riches compares to any revolution in human history -- including the great Age of Exploration in the 16th to 18th centuries.
Note: I just read SpaceX engineer Andrew Rader’s book Beyond the Known for the second time and he knows his seafaring history as well as anyone. Highly recommend it.
But it gets worse. Just as we come to grips with the bad guys always being one step ahead of our latest data defenses, a new weapon has been presented to them that will intensify the war exponentially.
That weapon, of course, is Artificial Intelligence (AI). As much as I praise the growth and advancement that AI is bringing to industry, science, and society, we can easily see it is a double-edged sword when hidden forces can manipulate and destroy from a safe distance in their cyber bunkers.
(end of my Zacks Confidential special report excerpt from October)
To see the full detailed report with expert analysis on cybercrime scope, projections, and costs, just go to State of Threat.
If you don't have a subscription to Zacks Confidential -- where one of a dozen analysts writes a unique research report on a particular industry, sector, or economy-wide growth trend every Monday -- it is by far one of the best deals in investment analysis anywhere at under $100 per year.
Last time I checked it was still only $59 a year for 52 fresh, proprietary reports. And you get access to all the archives going back several years. Whatever the current price, you can get a 30-day trial for a buck and see for yourself if you find value in our research and stock picks.
Why Did I Recommend 4 Cyber Stocks in October?
I think you get a rough idea from my Zacks Confidential excerpt above that I slowly become aware last summer that the threat landscape had become obscenely sophisticated and sinister, like trying to fight Skynet without help from the Terminator.
So I wanted to go all-in on the best defenders I could find -- since none of them can do the job alone and most enterprises use several of them, just like any SaaS subscription.
Redundancy is essential for security, as any military or IT leader will tell you.
Here were my October rationales for picking CyberArk, CrowdStrike, Okta, and Datadog...
CyberArk Software (CYBR - Free Report) : This $6.7 billion veteran provider of enterprise security is growing sales this year and next at 24% to $900 million. I think this Zacks #2 Rank is undervalued and so does the team at Piper Sandler who has a $200 PT on shares.
Headquartered in Israel, CyberArk was founded in 1999. The company is a vital security partner to more than 5,400 global businesses, which include over 50% of the Fortune 500 and more than 35% of the Global 2000 companies.
CrowdStrike (CRWD - Free Report) : This $44 billion leader in “edge” security for mobile, IoT, and government / military applications has been surging to new highs since their August 31 earnings report. As many employees and senior management continue to work from home and remotely, the threat vulnerabilities are multiplied outside of enterprise firewalls. CrowdStrike's Zero Trust solution is intended to prevent breaches in real time on any identity, endpoint, or remote workload.
This Zacks #2 Rank is more expensive given the recent stock move, but with 35% topline growth this year -- and next year projected to tag $4 billion with another 28% advance -- it's going to remain on the top list for growth investors. It doesn’t hurt that profits are following with an 83% jump to EPS of $2.82. And these are the guys, led by founder George Kurtz, who have deep experience in Europe and Asia and are watching every move that Russia and China make.
Okta (OKTA - Free Report) : A $14 billion leader in identity security, trying to prevent human credential breaches as happened with MGM. Okta was not to blame for that breach, and now they have more intel about where to target defenses to prevent further identity breaches. With 19% sales growth this year and 14% projected next year to cross $2.5 billion, the stock is a relative bargain trading under 6 times sales.
They have also become quickly profitable with profits surging 3,000% this year and still looking at potential 28% growth next year to $1.50 EPS. I have to explore the extent of their R&D with biometrics, but I have some sources telling me to be optimistic this is a field they will also lead in.
Datadog (DDOG - Free Report) : Here’s what I wrote when I bought this stock for my TAZR Trader group last week (early October)...
TAZR Portfolio is buying a starter position in Datadog (DDOG - Free Report) between $85 and $90. We would add to this Zacks #1 Rank on any drop after earnings 11/2.
While DDOG is largely a data monitoring and analytics platform, Piper Sandler recently made it one of their top 5 cybersecurity picks as an end-to-end observability and cloud security platform. The Piper team has a price target for DDOG shares at $115, implying over 25% potential upside.
Data is the gold of this new digital age and we need look no further than the recent acquisition of Splunk by Cisco to see what enterprises are willing to invest to stay ahead.
There's more intel on both DDOG and CYBR in the full Zacks Confidential report State of Threat.
And here's how the 4 picks have done since October 17 through last Friday...
CRWD: +76.62%
CYBR: +65.57%
DDOG: +50.82%
OKTA: +2.51%
Finally, if you don't own any cybersecurity stocks, I recommend buying CYBR and OKTA soon.