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On Thursday, Guggenheim analysts increased their price target on CyberArk Software (NASDAQ:CYBR) shares to $417 from $373 while sustaining a Buy rating on the stock. The company, currently trading at $380.84, has shown impressive momentum with a 58.57% return over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with analyst targets ranging from $303 to $450. The adjustment follows the anticipation that CyberArk will surpass its fourth-quarter subscription and total revenue targets, with significant upside potential and a modest increase to Annual Recurring Revenue (ARR).
The analysts project that CyberArk will provide guidance for both initial 2025 total revenue and ARR above current market expectations, which predict a year-over-year growth of 32% and 21%, respectively. This optimism is supported by the company’s strong historical performance, with InvestingPro data showing a robust revenue growth of 30.31% and an impressive gross profit margin of 81.07%. Despite concerns that first-quarter total revenue estimates may be overly optimistic, the analysts see potential for CyberArk to outperform these projections.
The updated fourth-quarter guidance from CyberArk includes a complete quarter’s contribution from the recently acquired Venafi, adding $164 million in incremental ARR, which exceeds the ARR management anticipated at the time of the acquisition announcement. The analysts express confidence in the long-term synergies between CyberArk and Venafi but note that the revenue characteristics of Venafi have added complexity to the financial model, presenting a perceived risk to first-quarter revenue expectations.
The majority of Venafi’s acquired ARR is from term subscriptions, although CyberArk’s management indicated that pipelines are heavily leaning toward Software (ETR:SOWGn) as a Service (SaaS) offerings. Field checks have returned positive signals for the quarter, with all partners meeting or surpassing their targets, and pipeline commentary was very positive.
The analysts’ decision to raise the price target reflects their continued belief in CyberArk’s growth trajectory and market position. CyberArk is scheduled to report its fourth-quarter 2024 earnings on Thursday, February 13, before the market opens. With an overall financial health score rated as "GOOD" by InvestingPro, which offers 16 additional valuable insights about the company, investors can access comprehensive analysis through the Pro Research Report, available exclusively to subscribers.
In other recent news, CyberArk Software has been the focus of several financial services firms increasing their price targets. Piper Sandler raised its target from $380 to $440, expressing confidence in CyberArk’s potential to accelerate growth of the recently acquired Venafi. Similarly, UBS increased its target from $400 to $440, citing positive feedback from partner checks for CyberArk’s fourth quarter and its integration with Venafi. Rosenblatt Securities also raised its price target to $415 from $345, highlighting positive indicators from partner discussions and a robust product pipeline. Lastly, Truist Securities analyst Junaid Siddiqui increased the price target on CyberArk to $385 from $350, emphasizing the increasing importance of Privilege Access Management.
In other developments, CyberArk announced a strategic integration with SentinelOne (NYSE:S)’s Singularity, an AI-powered cybersecurity platform. The collaboration aims to strengthen endpoint threat detection and response by combining AI-driven security analytics and introducing new CyberArk identity data into SentinelOne Singularity. This integrated approach promises several benefits, such as detecting and preventing ransomware and credential theft, and accelerating response and mitigation with comprehensive threat intelligence.
These are recent developments in the cybersecurity company’s growth and strategic positioning. The raised price targets and strategic partnership reflect the market’s optimism about CyberArk’s future performance and market position. As always, investors are advised to consider these developments in light of their own investment strategies and risk tolerance levels.
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