Back to top

Image: Bigstock

What's in the Offing for CyberArk's (CYBR) Q2 Earnings?

Read MoreHide Full Article

CyberArk (CYBR - Free Report) is scheduled to report second-quarter results on Aug 12.

The company projects its second-quarter revenues in the range of $111 million to $119 million. The Zacks Consensus Estimate for the same is pegged at $116.3 million, indicating an improvement of 9.2% from the year-ago quarter.

The company anticipates the bottom line between a non-GAAP loss of 11 cents and non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate for non-GAAP earnings stands at 3 cents per share, suggesting a significant year-over-year decline of 92.9%.

The company’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 77.5%.

CyberArk Software Ltd. Price and EPS Surprise CyberArk Software Ltd. Price and EPS Surprise

CyberArk Software Ltd. price-eps-surprise | CyberArk Software Ltd. Quote

Factors to Note

The global leader in Identity Security provider’s second-quarter performance is likely to have benefited from global expansion initiatives and continued investment in enhancing sales team. With the ramped-up sales capacity back in 2020, the company witnessed a productivity surge in the first quarter of 2021. The momentum is anticipated to have increased further in the quarter to be reported.

The company is expected to have gained from strong demands for its products like on-premises Privileged Access Management as enterprises worldwide continue working in a hybrid environment in a post-COVID world.

Growing traction of Endpoint Privilege Manager within customers of all sizes and across industries might have acted as a tailwind. A large chunk of CyberArk’s current customer base belongs to the mid-market, which has prompted the company to focus on expanding its presence across small- and medium-sized businesses. As a result, initiatives taken over the last couple of years toward formalizing mid-market sales motion may have contributed to the top line in the quarter to be reported.

Nonetheless, strategic move of shifting the business model to selling more subscription-based services from selling perpetual licenses might have negatively impacted CyberArk’s second-quarter financial performance. On the first-quarter earnings release, the company had stated that the SaaS and subscription bookings created additional headwinds of about $11 million in that quarter.

The company is likely to have continued investing in enhancing its cloud infrastructure deployments, and sales and marketing capabilities in the June-end quarter, inflating expenses and straining margins. Adverse foreign-currency fluctuations and macroeconomic turbulence might have weighed on the second-quarter performance.

What Our Model Says

Our proven model predicts an earnings beat for CyberArk this time around. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

CyberArk currently has a Zacks Rank #2 and an Earnings ESP of +37.93%.

Some Other Stocks With Favorable Combinations

Here are some other companies in the broader computer and technology sector, which you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +42.09% and a Zacks Rank #1 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Canon, Inc. (CAJ - Free Report) has an Earnings ESP of +22.03% and a Zacks Rank #1, at present.

Iridium Communications Inc. (IRDM - Free Report) has an Earnings ESP of +33.33% and a Zacks Rank #2 currently.