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Why Is CyberArk Software (CYBR) Down 14.3% Since the Last Earnings Report?
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It has been about a month since the last earnings report for CyberArk Software Ltd. (CYBR - Free Report) . Shares have lost about 14.3% 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 of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Tops Q1 Earnings but View Soft
Keeping its earnings streak alive for the 11th consecutive quarter, CyberArk Software reported better-than-expected first-quarter 2017 results. Furthermore, the company’s top- and bottom-line results not only marked significant year-over-year improvement, but also exceeded its outlook across all metrics including revenue, operating income and earnings.
The company reported non-GAAP earnings per share of $0.28 which came well above management’s guidance range of $0.21–$0.23 and marked year-over-year improvement of 21.7%.
Quarter Details
CyberArk’s revenues jumped 25.8% year over year to $59 million and surpassed the Zacks Consensus Estimate of $58 million. The company’s revenues increased on a year-over-year basis, primarily due to higher-than-anticipated demand for its privileged account security platform.
Revenues were also boosted by a 20% increase in License revenues, which came in at $33 million and accounted for 56% of total revenue. Also, a 34% year-over-year increase in Maintenance and Professional Services revenues (44% of total revenues) positively impacted the quarterly results.
Geographically, on a year-over-year basis, revenues from the Americas increased 28% and contributed 63% of total revenue. EMEA increased 11% and accounted for 29% of total revenue. Revenues in the Asia Pacific and Japan surged a whopping 90% year over year, representing 8% of total revenue.
CyberArk’s non-GAAP gross margin declined to 86.5% in the first quarter from 87.6% in the year-ago quarter. On an adjusted basis (excluding amortization of intangible assets and other one-time items buts including stock-based compensation), gross margin contracted 130 basis points (bps) on a year-over-year basis to 86.9%. The decline was primarily due to slight change in revenue mix, and investments cloud infrastructure and professional services which were outlined during the fourth-quarter 2016 earnings conference call.
The company’s non-GAAP operating margin shrunk 120 bps to 21.6%. On an adjusted basis (excluding amortization of intangible assets and other one-time items but including stock-based compensation) operating margin contracted 300 bps from the year-ago quarter to 12.7%, primarily due to lower gross margin and higher adjusted operating expenses as a percentage of revenues.
Adjusted operating expenses grew 28.7% year over year to $43.1 million mainly due to increased investment toward enhancing product offerings and expanding sales capabilities.
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $267.7 million, up from $238.3 million at the end of fourth-quarter 2016. Receivables were $34.9 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 approximately $16 million for the first quarter.
Guidance
The company provided guidance for the second quarter and updated the full-year 2017 outlook.
For the first quarter, CyberArk expects revenues in a range of $61–$62 million (mid-point $61.5 million), representing 21–23% year-over-year growth. Non-GAAP operating income is expected to be in a range of $10.9–$11.7 million. The company projects non-GAAP earnings for the second quarter in the $0.23–$0.25 range.
For the year, the company raised its revenue guidance range, but lowered non-GAAP operating income and earnings views. CyberArk now anticipates revenues in a range of $268.5–$271.5 million (mid-point $270 million), representing 24–25% year-over-year growth, up from the previous range of $267–$270 million (mid-point $268.5 million).
However, the non-GAAP operating income expectation has been lowered to $55–$57 million from the previous guidance range of $56–$58 million. Similarly, non-GAAP earnings for 2017 are now expected to be between $1.18 and $1.22 per share, down from the earlier guided 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', though it is lagging a lot on the momentum front with a 'F'. The stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% 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.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We expect below average returns from the stock in the next few months.
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Why Is CyberArk Software (CYBR) Down 14.3% Since the Last Earnings Report?
It has been about a month since the last earnings report for CyberArk Software Ltd. (CYBR - Free Report) . Shares have lost about 14.3% 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 of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Tops Q1 Earnings but View Soft
Keeping its earnings streak alive for the 11th consecutive quarter, CyberArk Software reported better-than-expected first-quarter 2017 results. Furthermore, the company’s top- and bottom-line results not only marked significant year-over-year improvement, but also exceeded its outlook across all metrics including revenue, operating income and earnings.
The company reported non-GAAP earnings per share of $0.28 which came well above management’s guidance range of $0.21–$0.23 and marked year-over-year improvement of 21.7%.
Quarter Details
CyberArk’s revenues jumped 25.8% year over year to $59 million and surpassed the Zacks Consensus Estimate of $58 million. The company’s revenues increased on a year-over-year basis, primarily due to higher-than-anticipated demand for its privileged account security platform.
Revenues were also boosted by a 20% increase in License revenues, which came in at $33 million and accounted for 56% of total revenue. Also, a 34% year-over-year increase in Maintenance and Professional Services revenues (44% of total revenues) positively impacted the quarterly results.
Geographically, on a year-over-year basis, revenues from the Americas increased 28% and contributed 63% of total revenue. EMEA increased 11% and accounted for 29% of total revenue. Revenues in the Asia Pacific and Japan surged a whopping 90% year over year, representing 8% of total revenue.
CyberArk’s non-GAAP gross margin declined to 86.5% in the first quarter from 87.6% in the year-ago quarter. On an adjusted basis (excluding amortization of intangible assets and other one-time items buts including stock-based compensation), gross margin contracted 130 basis points (bps) on a year-over-year basis to 86.9%. The decline was primarily due to slight change in revenue mix, and investments cloud infrastructure and professional services which were outlined during the fourth-quarter 2016 earnings conference call.
The company’s non-GAAP operating margin shrunk 120 bps to 21.6%. On an adjusted basis (excluding amortization of intangible assets and other one-time items but including stock-based compensation) operating margin contracted 300 bps from the year-ago quarter to 12.7%, primarily due to lower gross margin and higher adjusted operating expenses as a percentage of revenues.
Adjusted operating expenses grew 28.7% year over year to $43.1 million mainly due to increased investment toward enhancing product offerings and expanding sales capabilities.
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $267.7 million, up from $238.3 million at the end of fourth-quarter 2016. Receivables were $34.9 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 approximately $16 million for the first quarter.
Guidance
The company provided guidance for the second quarter and updated the full-year 2017 outlook.
For the first quarter, CyberArk expects revenues in a range of $61–$62 million (mid-point $61.5 million), representing 21–23% year-over-year growth. Non-GAAP operating income is expected to be in a range of $10.9–$11.7 million. The company projects non-GAAP earnings for the second quarter in the $0.23–$0.25 range.
For the year, the company raised its revenue guidance range, but lowered non-GAAP operating income and earnings views. CyberArk now anticipates revenues in a range of $268.5–$271.5 million (mid-point $270 million), representing 24–25% year-over-year growth, up from the previous range of $267–$270 million (mid-point $268.5 million).
However, the non-GAAP operating income expectation has been lowered to $55–$57 million from the previous guidance range of $56–$58 million. Similarly, non-GAAP earnings for 2017 are now expected to be between $1.18 and $1.22 per share, down from the earlier guided 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', though it is lagging a lot on the momentum front with a 'F'. The stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% 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.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We expect below average returns from the stock in the next few months.