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On Monday, DA Davidson reiterated its Buy rating and $475.00 price target for CyberArk Software (NASDAQ:CYBR), emphasizing the stock’s appeal following a recent price decline. With the stock currently trading at $339.47 and analyst targets ranging from $303 to $500, Rudy Kessinger, an analyst at the firm, highlighted CyberArk as a top pick in the security software sector, noting that despite its high valuation, the approximately 18% pullback offers an attractive entry point for investors. According to InvestingPro, 19 analysts have recently revised their earnings estimates upward for the upcoming period.
Kessinger’s assessment points to CyberArk’s position as a leading identity security platform, with a widening competitive gap compared to its peers. The company’s impressive 33.1% revenue growth and robust gross profit margin of 79.18% support this view. The firm’s analysts anticipate that significant platform-oriented deals and expansions will continue to propel earnings above current expectations. They foresee a sustainable annual recurring revenue (ARR) growth rate of over 20% for at least the next several years.
The company’s financial outlook is also promising, with expectations for free cash flow (FCF) margin to increase from 18% in calendar year 2025, as per the company’s guidance, to a target of 27% by calendar year 2028. DA Davidson believes this target is achievable and supports the company’s valuation. InvestingPro data shows the company maintains a strong financial health score of 2.61 (labeled as "GOOD"), with more cash than debt on its balance sheet.
While CyberArk’s shares are trading at a premium compared to its peers, which show growth rates of 20-30% and are valued at approximately 10.5 times enterprise value to calendar year 2026 revenue (EV/CY26 Rev) or around 42 times enterprise value to calendar year 2026 free cash flow (EV/CY26 FCF), Kessinger argues that the premium is justified. The durability of CyberArk’s growth and the valuation based on EV/FCF over the next couple of years provide a solid basis for the firm’s confidence in the stock. For a deeper understanding of CyberArk’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, along with 12 additional ProTips, available exclusively on InvestingPro.
In other recent news, CyberArk Software has been the focus of various analyst assessments, reflecting confidence in its financial performance and strategic initiatives. Stifel analysts have maintained a Buy rating with a $444 price target, citing CyberArk’s growth in machine identity security and its robust fourth-quarter earnings. Meanwhile, Cantor Fitzgerald adjusted its price target to $400, maintaining an Overweight rating, as they recognize CyberArk’s leadership in identity security and its strategic expansion into areas like Cloud Security and DevSecOps. Citi analysts raised their price target to $450, reiterating a Buy rating, following CyberArk’s analyst day where the company set financial targets for 2028, including a compound annual growth rate for revenue of less than 20%.
Truist Securities also reaffirmed a Buy rating with a $450 price target, praising CyberArk’s innovation and its ability to capitalize on market trends such as Zero Trust security frameworks. CyberArk’s transition to a subscription/SaaS model is noted by Cantor Fitzgerald as a positive shift that could enhance operating leverage. The company is expected to benefit from the increasing importance of securing machine identities, as highlighted by Truist. Stifel’s analysis points to emerging growth areas like Machine Identity and Identity Governance, suggesting significant prospects for CyberArk. These recent developments underscore the company’s strategic direction and its potential for continued growth in the cybersecurity sector.
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