Back to top

CyberArk Software (CYBR) Q2 Earnings: Likely to Disappoint?

Read MoreHide Full Article

CyberArk Software Ltd. (CYBR - Free Report) is set to report second-quarter 2017 results on Aug 8. Last quarter, the company posted positive earnings surprise of 7.7%. Let us see how things are shaping up for this announcement.

Factors at Play

CyberArk is an Israeli company that specializes in protecting accounts from cyber-attacks. The company offers several products that protect passwords, close loopholes in the security system, and secure cloud-based assets.

CyberArk recently announced preliminary results for second-quarter 2017.

The company projects second-quarter 2017 revenues in the range of $57–$57.5 million, down from the previous guidance of $61–$62 million. The Zacks Consensus Estimate is currently pegged at $63.3 million. License revenue is anticipated in the range of $30–$30.5 million. Non-GAAP operating income is predicted to be in the range of $8.5–$8.9 million, down from the earlier guidance of $10.9–$11.7 million.

CyberArk provided not-so-encouraging guidance for the second quarter, due to lower-than-expected business in Europe and the Middle East (EMEA). Udi Mokady, CEO of CyberArk, said, "The primary reason for our revenue shortfall was our performance in EMEA, where certain deals that we anticipated would close did not close by the end of the quarter."

While maintaining its earnings streak for the 11th consecutive quarter, CyberArk reported better-than-expected first-quarter 2017 results. However, in the last two quarters, the company reported the slowest revenue growth rate of around 25% since it was enlisted in Sep 2014. Prior to this, CyberArk witnessed more than 35% revenue growth every quarter.

Moreover, intense competition from peers such as CA Inc. (CA - Free Report) and Microsoft Corp. along with an uncertain macroeconomic environment adds to its woes.

Nonetheless, we are optimistic about CyberArk, given a healthy security market, strong product lineup, deal wins and investment plans, which are likely to boost results in the long run. Furthermore, its strategy of growing through acquisitions is encouraging. Additionally, investments in product suite and go-to-market are the other positives.

CyberArk Software Ltd. Price and EPS Surprise

 

Earnings Whispers

Our proven model does not conclusively show that CyberArk Softwarewill beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP for CyberArk Softwareis -12.50%. This is because the Most Accurate estimate of 7 cents is pegged lower than the Zacks Consensus Estimate of 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CyberArk Software carries a Zacks Rank #4 (Sell). Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may consider as our proven model shows these have the right combination of elements to post an earnings beat this quarter:

Bio-Techne Corp (TECH - Free Report) , carries a Zacks Rank #2 and has an Earnings ESP of +1.10%.

Symantec Corporation (SYMC - Free Report) , with an Earnings ESP of +7.41%, carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


CyberArk Software Ltd. (CYBR) - free report >>

Symantec Corporation (SYMC) - free report >>

CA Inc. (CA) - free report >>

Bio-Techne Corp (TECH) - free report >>


More from Zacks Analyst Blog

You May Like