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CyberArk's (CYBR) Q2 Earnings: Is a Beat in the Offing?

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CyberArk Software Ltd. (CYBR - Free Report) is scheduled to report second-quarter 2018 results on Aug 7.

Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive surprise of 27.54%.

In the last reported quarter, the company came up with a positive earnings surprise of 52.38%. Let's see how things are shaping up for this announcement.

CyberArk Software Ltd. Price and EPS Surprise

 

CyberArk Software Ltd. Price and EPS Surprise | CyberArk Software Ltd. Quote

Factors Likely to Drive Results

CyberArk is riding on its acquisition strategy. In March, the company acquired certain assets of a privately-held cloud security provider, Vaultive, which is helping it address the needs of the administrators of Software-as-a-Service, Infrastructure-as-a-Service and Platform-as-a-Service projects.

Furthermore, the rising demand for cyber security and the growing popularity of cloud computing have further increased demand for adequate security policies, protocols and products. CyberArk is growing rapidly in this space on the back of its privileged access management solutions. The second quarter has witnessed a few enhancements in these solutions, which are likely to have positively impacted its revenues.

The company’s launch of CyberArk Marketplace in the second quarter is also likely to have augured well for the company

Moreover, CyberArk’s strategy of enhancing relationship with channel partners is bringing in new customers. The company has expanded its offering for managed security service providers in April, allowing them to access more market opportunities and create additional revenue streams. This is expected to pull in more customers.

Apart from this, the company’s C3 technology alliance program is also influencing deals, which in turn, are boosting its revenues. CyberArk has nearly 70 partners now under this program, including companies like Proofpoint, Qualys and ServiceNow. We believe the continued positive trend of this program will continue driving its top-line performance.

However, increasing operating expenses pertaining to initiatives related to enriching the solutions suite and enhancing sales competency are likely to remain an overhang.

Moreover, a substantial portion of the company’s sales is derived from outside the United States. The global trade war, which continued through the second quarter, is  a concern

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

CyberArk has a Zacks Rank #3 and an Earnings ESP of +3.38%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Qualys, Inc. (QLYS - Free Report) with an Earnings ESP of +0.66%, and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Radware Ltd. (RDWR - Free Report) with an Earnings ESP of +8.57% and a Zacks Rank #1.

Proofpoint, Inc. (PFPT - Free Report) with an Earnings ESP of +1.23% and a Zacks Rank #2.

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Radware Ltd. (RDWR) - free report >>

Qualys, Inc. (QLYS) - free report >>

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

Proofpoint, Inc. (PFPT) - free report >>

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