Crispr Therapeutics shares tumble after significant earnings miss
On Thursday, Barclays (LON:BARC) analyst Saket Kalia increased the price target on CyberArk Software (NASDAQ:CYBR) to $450 from the previous $375 while maintaining an Overweight rating on the stock. According to InvestingPro data, this new target represents the highest among analyst forecasts, with the stock currently trading near its 52-week high. Kalia's revision follows CyberArk's announcement that it surpassed the $1 billion annual recurring revenue (ARR) milestone in the fourth quarter. The company's net new ARR of approximately $243 million exceeded expectations, bolstered by both organic and inorganic growth. InvestingPro data shows impressive revenue growth of 30.3% over the last twelve months, supported by robust gross margins of 81.1%. With 14+ additional ProTips available on InvestingPro, investors can gain deeper insights into CyberArk's financial strength and market position.
CyberArk also announced the acquisition of Identity Governance and Administration (IGA) vendor Zilla Security for around $175 million, a strategic move aimed at targeting the smaller market segment. This acquisition is expected to complement CyberArk's existing offerings and potentially expand its customer base.
The analyst's optimism is further supported by CyberArk's financial guidance for fiscal year 2025, which projects approximately 21% year-over-year growth in ARR and around 23% free cash flow (FCF) margins. These figures surpass Barclays' initial estimates. Kalia suggests that Zilla Security's contribution could help mitigate the roughly $6 million foreign exchange headwind on ARR, and he anticipates continued margin expansion following a significant beat in fiscal year 2024.
Looking ahead, CyberArk's Analyst Day is scheduled for February 24th, where the company is expected to discuss long-term strategies. For comprehensive analysis of CyberArk's growth trajectory and financial health (currently rated as "GOOD" by InvestingPro), investors can access the detailed Pro Research Report, available exclusively to subscribers. Barclays has updated its three-year model, estimating CyberArk's ARR to reach approximately $1.9 billion by fiscal year 2027, representing 17-20% growth. The firm also forecasts a FCF margin of 25% for the same period. The increased price target of $450 is based on approximately 45 times Barclays' estimated FCF of nearly $494 million for fiscal year 2027.
Kalia's comments highlight the positive developments at CyberArk, including the significant ARR milestone, the acquisition of Zilla Security, and the robust financial outlook for the coming years. The raised price target reflects confidence in the company's growth trajectory and its ability to navigate potential headwinds while expanding its market presence.
In other recent news, CyberArk Software has been receiving positive attention from analysts, with Cantor Fitzgerald and Stifel both raising their price targets on the company's shares. Cantor Fitzgerald increased its price target from $415 to $445, maintaining an Overweight rating, while Stifel raised its target to $444 and then to $450, both times keeping a Buy rating. These adjustments follow CyberArk's impressive earnings results, which surpassed consensus estimates and demonstrated strong execution in business operations. Key financial metrics such as annual recurring revenue (ARR), revenue, and free cash flow all exceeded expectations, suggesting robust growth for the future.
Further, CyberArk has acquired Zilla Security, a company specializing in modern Identity Governance and Administration (IGA) solutions. This strategic move is expected to enhance CyberArk's Identity Security Platform by integrating Zilla's AI-powered IGA capabilities, thus expanding its ability to secure both human and non-human identities. The acquisition, which cost CyberArk $165 million in cash plus a $10 million earn-out tied to certain milestones, is part of the company's ongoing strategy to secure every identity with appropriate privilege controls.
These are recent developments that emphasize CyberArk's strong performance and strategic growth initiatives, as well as the increasing confidence of analysts in the company's financial future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.