Back to top

Image: Bigstock

What's in Store for CyberArk (CYBR) This Earnings Season?

Read MoreHide Full Article

CyberArk Software Ltd. (CYBR - Free Report) is set to report third-quarter 2017 results on Nov 2. The company delivered a positive earnings surprise of 5% in the previous quarter. Let's see how things are shaping up for this announcement.

Factors at Play

The decelerating revenue growth trend makes us slightly cautious about CyberArk's third-quarter results. Notably, the company has witnessed more than 35% growth in quarterly revenues since it was enlisted in September 2014 except in the past three quarters.

During fourth-quarter 2016, and the first and second quarters of 2017, year-over-year growth rates were 25%, 26% and 14%, respectively. Moreover, CyberArk’s revenue growth guidance range of 13-15% for the third quarter and 17-18% for 2017 has increased our concerns.

Furthermore, flaring up operating expenses have been hurting its profitability. Escalated operating expenses are mainly stemmed by increased investment toward enhancing product offerings and expanding sales capabilities. Though these investments will have long-term benefits, we expect these will drag the company’s bottom-line in the near term.

Earnings Whispers

Our proven model does not conclusively show that CyberArk Software will likely 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 Software is -2.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CyberArk carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise.

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 With Favorable Combination

Here are a few companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:

NVIDIA Corp. (NVDA - Free Report) , with an Earnings ESP of +0.53% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

HubSpot, Inc. (HUBS - Free Report) , with an Earnings ESP of +26.53% and a Zacks Rank of 2.

AMTEK, Inc. (AME - Free Report) , with an Earnings ESP of +0.18% and a Zacks Rank of 3.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

Published in