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With much of Wall Street's focus still drawn to artificial intelligence (AI), weight-loss drugs, and major price swings in commodities - to name a few megatrends - there is one industry that continues to enjoy quietly surging demand, with near-constant reminders of its importance to the increasingly digital global economy. As online threats get more prevalent and more sophisticated, the cybersecurity industry is the first line of defense many tech-dependent companies have in keeping their customers and their business-critical assets safe from harm.
Notably, one high-profile hacking incident with UnitedHealth Group (UNH) led to $872 million in Q1 charges alone, with total expenses from the breach expected to top $1 billion this year. In a separate incident, Microsoft (MSFT) claimed that its employees’ secret data was compromised by a Russian state hacker gang.
With even the largest - and presumably, tech-savviest - companies getting targeted, these incidents are stark reminders that cybersecurity is likely to remain a major investment in the years ahead. Against this backdrop, let's take a look at one cybersecurity company that's in the spotlight after outperforming analysts’ earnings expectations last week.
About CyberArk Software Stock
CyberArk Software Ltd. (CYBR) is a security solutions company aimed at cyber threats. It provides privileged access security (PAS) solutions, access management solutions, and secret management. Founded in 1996, the Israel-headquartered CyberArk serves companies across various industries, including finance, manufacturing, healthcare, insurance, retail, transportation, and more.
CYBR stock is up 7.6% this year, and more than 77% in the past 52 weeks.
CyberArk Posts Solid Results and Raises Guidance
CyberArk posted their Q1 earnings results on May 2, where revenue came in at $221.6 million - up 37% YoY, and beating analysts' consensus estimate of $213.2 million. Earnings stood at $0.75 per share, easily outpacing estimates of $0.30 per share. Its subscribed Annual Recurring Revenue (ARR) increased from $92.7 million last year to $156.2 million, a 69% increase YoY, while total ARR grew 34% to $811 million.
The company also raised its full-year outlook, and now expects revenue in the range of $928.0 million to $938.0 million, signifying 23% to 25% growth from last year. Non-GAAP operating income is expected to range between $90.5 million and $99.5 million, while non-GAAP net income is projected in the range of $1.88 per share to $2.07 per share.
As for Q2, management anticipates revenue in the range of $215.0 million to $221.0 million, implying 22% to 26% growth year-over-year. Non-GAAP operating income is forecast at $12.0 million to $17.0 million, while non-GAAP net income is expected to arrive between $0.34 per share to $0.44 per share.
Is CyberArk Stock a Buy?
Analysts are very bullish on the cybersecurity stock, with a consensus “Strong Buy” rating for CYBR. At the moment, 28 analysts are covering the stock, 26 of which have a “Strong Buy” rating, while 1 has a “Moderate Buy” rating, and 1 more analyst has a “Hold” rating.
CYBR has a mean price target of $283.37 from analysts, implying a healthy 20.3% potential upside from current levels.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
