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CyberArk (CYBR) Down 9.4% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CyberArk Software Ltd. (CYBR - Free Report) . Shares have lost about 9.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CyberArk Beats Q4 Earnings and Revenue Estimates
Keeping its earnings streak alive for the tenth consecutive quarter, CyberArk reported better-than-expected fourth-quarter 2016 results. The company reported adjusted earnings per share (excluding amortization of intangible assets and other one-time items but including stock-based compensation) on a proportionate tax basis of $0.30 per share, which came way ahead of the Zacks Consensus Estimate of $0.24 per share. Adjusted earnings however were flat year over year.
Quarter Details
CyberArk’s revenues grew 25% year over year to $64.4 million and surpassed the Zacks Consensus Estimate of $63 million. The company’s revenues increased on a year-over-year basis, primarily due to better-than-expected demand for its privileged account security platform.
Revenues were also boosted by a 23% increase in License revenues, which came in at $40.8 million and accounted for 63% of total revenue. Also, a 28% year-over-year increase in Maintenance and Professional Services revenues (37% of total revenues) positively impacted the quarterly results.
Geographically, on a year-over-year basis, revenues from the Americas increased 12% and contributed 58% of total revenue. EMEA increased 53% and accounted for 36% of total revenue. Asia-Pacific and Japan increased 30% year over year, representing 6% of total revenue.
CyberArk’s adjusted gross margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) contracted 60 basis points (bps) on a year-over-year basis to 86.9%, primarily due to higher cost of sales.
The company’s adjusted operating margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) shrunk 80 bps from the year-ago quarter to 22.3%, primarily due to lower gross margin and higher adjusted operating expenses as a percentage of revenues. Adjusted operating expenses increased 25.7% year over year to $41.6 million.
The company’s adjusted net income (excluding amortization of intangible assets and other one-time items buts including stock-based compensation) came in at $11 million, which improved from $10.8 million reported in the year-ago quarter. On a GAAP basis, net income came in at $10.2 million compared with $9.9 million reported in the year-ago period.
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $238.3 million, flat with the previous quarter. Receivables were $20.4 million at the end of the quarter.
CyberArk’s balance sheet does not have any long-term debt. The company reported cash flow from operations of $59.2 million for 2016.
Guidance
The company provided guidance for the first quarter and full year 2017.
For the first quarter, CyberArk expects revenues in a range of $57 million to $58 million (mid-point $57.5 million), representing 22% to 24% year-over-year growth. Non-GAAP operating income is expected to be in a range of $9.9 million to $10.7 million. The company expects non-GAAP earnings for the first quarter in a range of $0.21 per share to $0.23 per share.
For the year, the company expects revenues in a range of $267 million to $270 million (mid-point $268.5 million), representing 23% to 25% year-over-year growth. Non-GAAP operating income is expected to be in a range of $56 million to $58 million. The company expects non-GAAP earnings for 2017 in a range of $1.20 per share to $1.24 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, CyberArk's stock has a nice Growth Score of 'B', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our styles scores, the stock is equally suitable for growth and momentum investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
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CyberArk (CYBR) Down 9.4% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CyberArk Software Ltd. (CYBR - Free Report) . Shares have lost about 9.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CyberArk Beats Q4 Earnings and Revenue Estimates
Keeping its earnings streak alive for the tenth consecutive quarter, CyberArk reported better-than-expected fourth-quarter 2016 results. The company reported adjusted earnings per share (excluding amortization of intangible assets and other one-time items but including stock-based compensation) on a proportionate tax basis of $0.30 per share, which came way ahead of the Zacks Consensus Estimate of $0.24 per share. Adjusted earnings however were flat year over year.
Quarter Details
CyberArk’s revenues grew 25% year over year to $64.4 million and surpassed the Zacks Consensus Estimate of $63 million. The company’s revenues increased on a year-over-year basis, primarily due to better-than-expected demand for its privileged account security platform.
Revenues were also boosted by a 23% increase in License revenues, which came in at $40.8 million and accounted for 63% of total revenue. Also, a 28% year-over-year increase in Maintenance and Professional Services revenues (37% of total revenues) positively impacted the quarterly results.
Geographically, on a year-over-year basis, revenues from the Americas increased 12% and contributed 58% of total revenue. EMEA increased 53% and accounted for 36% of total revenue. Asia-Pacific and Japan increased 30% year over year, representing 6% of total revenue.
CyberArk’s adjusted gross margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) contracted 60 basis points (bps) on a year-over-year basis to 86.9%, primarily due to higher cost of sales.
The company’s adjusted operating margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) shrunk 80 bps from the year-ago quarter to 22.3%, primarily due to lower gross margin and higher adjusted operating expenses as a percentage of revenues. Adjusted operating expenses increased 25.7% year over year to $41.6 million.
The company’s adjusted net income (excluding amortization of intangible assets and other one-time items buts including stock-based compensation) came in at $11 million, which improved from $10.8 million reported in the year-ago quarter. On a GAAP basis, net income came in at $10.2 million compared with $9.9 million reported in the year-ago period.
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $238.3 million, flat with the previous quarter. Receivables were $20.4 million at the end of the quarter.
CyberArk’s balance sheet does not have any long-term debt. The company reported cash flow from operations of $59.2 million for 2016.
Guidance
The company provided guidance for the first quarter and full year 2017.
For the first quarter, CyberArk expects revenues in a range of $57 million to $58 million (mid-point $57.5 million), representing 22% to 24% year-over-year growth. Non-GAAP operating income is expected to be in a range of $9.9 million to $10.7 million. The company expects non-GAAP earnings for the first quarter in a range of $0.21 per share to $0.23 per share.
For the year, the company expects revenues in a range of $267 million to $270 million (mid-point $268.5 million), representing 23% to 25% year-over-year growth. Non-GAAP operating income is expected to be in a range of $56 million to $58 million. The company expects non-GAAP earnings for 2017 in a range of $1.20 per share to $1.24 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
CyberArk Software Ltd. Price and Consensus
CyberArk Software Ltd. Price and Consensus | CyberArk Software Ltd. Quote
VGM Scores
At this time, CyberArk's stock has a nice Growth Score of 'B', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our styles scores, the stock is equally suitable for growth and momentum investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.