CyberArk stock rating downgraded to Sector Perform by RBC after Palo Alto deal

Published 31/07/2025, 09:16
© CyberArk PR

Investing.com - RBC Capital downgraded CyberArk Software (NASDAQ:CYBR) from Outperform to Sector Perform while raising its price target to $448.00 from $420.00 following the announcement of the company’s acquisition by Palo Alto. The stock has shown impressive momentum, surging nearly 16% in the past week and trading close to its 52-week high of $452.

The downgrade comes after CyberArk announced it is being acquired by Palo Alto in a cash-and-stock transaction valued at approximately $25 billion based on the unaffected stock price. Both companies’ boards have approved the deal. With robust gross profit margins of 78% and revenue growth of 35% over the last twelve months, InvestingPro analysis shows CyberArk’s strong operational performance has attracted strategic interest.

RBC Capital analyst Matthew Hedberg noted the strategic rationale for Palo Alto to further consolidate the cybersecurity landscape with best-in-class identity solutions from CyberArk, but does not anticipate another bidder emerging given the size of the transaction.

CyberArk also pre-released its Q2/25 results, which exceeded expectations according to RBC. The company will forgo its previously scheduled earnings call on August 7.

The price target increase to $448.00 reflects the acquisition value, while the rating downgrade to Sector Perform indicates RBC’s view that the stock has limited upside potential beyond the agreed acquisition price.

In other recent news, CyberArk Software is set to be acquired by Palo Alto Networks (NASDAQ:PANW) in a transaction valued at approximately $25 billion. This deal involves a mix of cash and stock, with CyberArk shareholders receiving $45 per share in cash plus 2.2005 shares of Palo Alto Networks stock for each CyberArk share. Following the announcement of this acquisition, several analyst firms have downgraded CyberArk’s stock rating. Piper Sandler, UBS, Guggenheim, BTIG, and William Blair all downgraded the stock to a Neutral rating, citing the acquisition as a key factor. Piper Sandler and UBS raised their price targets slightly, while Guggenheim removed its price target altogether. The acquisition is seen as a strategic move by Palo Alto Networks to enhance its platform strategy by integrating CyberArk’s capabilities. The deal is structured such that its value is heavily influenced by Palo Alto Networks’ stock performance, with 90% of the deal value tied to it.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.