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CyberArk Software (CYBR) Looks Promising: Time to Hold?
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Stocks that display momentum and have enough prospects are the ones that investors like to add to their portfolio. CyberArk Software, Ltd. (CYBR - Free Report) is one such stock that looks quite promising on the back of its strong fundamentals and strategic initiatives.
So far this year, CyberArk is up 8.57% compared with the Zacks categorized IT Services industry that has increased 1.57%. Moreover, the stock looks quite attractive as it has a long-term earnings growth rate of 21.4%.
What’s Going in Favour of CyberArk?
CyberArk reported its quarterly numbers on Nov 3, 2016. The company reported adjusted earnings per share (excluding amortization of intangible assets and other one-time items buts including stock-based compensation) on a proportionate tax basis of 22 cents per share for the third quarter, which came ahead of the Zacks Consensus Estimate of 18 cents per share.
CyberArk’s revenues grew 37.2% year over year to $54.9 million and surpassed the Zacks Consensus Estimate of $52 million. The year-over-year increase was mainly driven by better-than-expected demand for its privileged account security platform.
CyberArk also raised its full-year 2016 guidance. The company now expects revenues in the range of $214.3 million to $215.3 million (previous guidance $210.5 million to $212.5 million), representing 33% to 34% year-over-year growth. The Zacks Consensus Estimate is pegged at $215 million. Non-GAAP operating income is expected to be in the range of $53.3 million to $54.1 million (previously $48.4 million to $50 million). The company now expects non-GAAP earnings for fiscal 2016 in the range of $1.16 per share to $1.18 per share (previous guidance $1.03 per share to $1.07 per share). The Zacks Consensus Estimate is pegged at 82 cents.
The company also provided a positive outlook for the fourth quarter. For the fourth quarter of fiscal 2016, CyberArk expects revenues in the range of $62 million to $63 million, representing 20% to 22% year-over-year growth. The Zacks Consensus Estimate is pegged at $63 million. The company expects non-GAAP earnings for the fourth quarter of fiscal 2016 in the range of 31 cents to 33 cents. The Zacks Consensus Estimate is pegged at 25 cents.
Moreover, over the past 60 days, all the earnings estimates have gone higher for fiscal 2016. These revisions pushed the Zacks Consensus Estimate up from earnings of 78 cents to 82 cents over the same time frame.
We note that the company has posted positive earnings surprises in the last four quarters with an average of 43.76%.
Other Aspects Worth Considering
We are optimistic about CyberArk given a healthy security market, strong product lineup, deal wins and investment plans, which should boost results in the long run. Furthermore, CyberArk’s strategy of growing through acquisitions is encouraging. Last year, the company made two important acquisitions of Cybertinel and Viewfinity.
According to research firm, Markets and Markets, the cyber security market is expected to touch $170.21 billion by 2020 from $106.32 billion in 2015, growing at an annual rate of 9.8%. We believe that CyberArk Software is in a favourable position to tap the opportunities.
Furthermore, investments in product suite and go-to-market are the other positives for the company.
It is worth mentioning that demand for cyber security is on the rise. With the advancement in technology, more organizations are adopting a bring-your-own-device policy, which has enhanced employee productivity with anytime, anywhere access. This indicates continued positive growth for CyberArk.
However, competition from International Business Machines Corporation (IBM - Free Report) , Microsoft Corporation (MSFT - Free Report) and Oracle Corporation (ORCL - Free Report) remains a concern.
Bottom Line
We expect the aforementioned factors to help the company sustain its strong momentum and stay afloat even amid difficult times. Hence, we suggest investors to hold on to the stock as of now.
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CyberArk Software (CYBR) Looks Promising: Time to Hold?
Stocks that display momentum and have enough prospects are the ones that investors like to add to their portfolio. CyberArk Software, Ltd. (CYBR - Free Report) is one such stock that looks quite promising on the back of its strong fundamentals and strategic initiatives.
So far this year, CyberArk is up 8.57% compared with the Zacks categorized IT Services industry that has increased 1.57%. Moreover, the stock looks quite attractive as it has a long-term earnings growth rate of 21.4%.
What’s Going in Favour of CyberArk?
CyberArk reported its quarterly numbers on Nov 3, 2016. The company reported adjusted earnings per share (excluding amortization of intangible assets and other one-time items buts including stock-based compensation) on a proportionate tax basis of 22 cents per share for the third quarter, which came ahead of the Zacks Consensus Estimate of 18 cents per share.
CyberArk’s revenues grew 37.2% year over year to $54.9 million and surpassed the Zacks Consensus Estimate of $52 million. The year-over-year increase was mainly driven by better-than-expected demand for its privileged account security platform.
CyberArk also raised its full-year 2016 guidance. The company now expects revenues in the range of $214.3 million to $215.3 million (previous guidance $210.5 million to $212.5 million), representing 33% to 34% year-over-year growth. The Zacks Consensus Estimate is pegged at $215 million. Non-GAAP operating income is expected to be in the range of $53.3 million to $54.1 million (previously $48.4 million to $50 million). The company now expects non-GAAP earnings for fiscal 2016 in the range of $1.16 per share to $1.18 per share (previous guidance $1.03 per share to $1.07 per share). The Zacks Consensus Estimate is pegged at 82 cents.
The company also provided a positive outlook for the fourth quarter. For the fourth quarter of fiscal 2016, CyberArk expects revenues in the range of $62 million to $63 million, representing 20% to 22% year-over-year growth. The Zacks Consensus Estimate is pegged at $63 million. The company expects non-GAAP earnings for the fourth quarter of fiscal 2016 in the range of 31 cents to 33 cents. The Zacks Consensus Estimate is pegged at 25 cents.
Moreover, over the past 60 days, all the earnings estimates have gone higher for fiscal 2016. These revisions pushed the Zacks Consensus Estimate up from earnings of 78 cents to 82 cents over the same time frame.
We note that the company has posted positive earnings surprises in the last four quarters with an average of 43.76%.
Other Aspects Worth Considering
We are optimistic about CyberArk given a healthy security market, strong product lineup, deal wins and investment plans, which should boost results in the long run. Furthermore, CyberArk’s strategy of growing through acquisitions is encouraging. Last year, the company made two important acquisitions of Cybertinel and Viewfinity.
According to research firm, Markets and Markets, the cyber security market is expected to touch $170.21 billion by 2020 from $106.32 billion in 2015, growing at an annual rate of 9.8%. We believe that CyberArk Software is in a favourable position to tap the opportunities.
Furthermore, investments in product suite and go-to-market are the other positives for the company.
It is worth mentioning that demand for cyber security is on the rise. With the advancement in technology, more organizations are adopting a bring-your-own-device policy, which has enhanced employee productivity with anytime, anywhere access. This indicates continued positive growth for CyberArk.
However, competition from International Business Machines Corporation (IBM - Free Report) , Microsoft Corporation (MSFT - Free Report) and Oracle Corporation (ORCL - Free Report) remains a concern.
Bottom Line
We expect the aforementioned factors to help the company sustain its strong momentum and stay afloat even amid difficult times. Hence, we suggest investors to hold on to the stock as of now.
Currently, CyberArk has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>