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On Monday, JPMorgan updated their outlook on CyberArk Software (NASDAQ:CYBR), increasing the price target to $443 from $431, while maintaining an Overweight rating on the shares. The firm’s analysis highlighted CyberArk’s exceptional organic growth, which exceeds 30%, and its achievement of over $1 billion in Annual Recurring Revenue (ARR). The company also expanded its margins by more than 1000 basis points and saw improvements in Free Cash Flow (FCF) generation. These accomplishments come amidst a growing demand for machine identity and AI security solutions. InvestingPro data confirms this strong performance, showing impressive revenue growth of 35.12% and industry-leading gross profit margins of 77.91%. According to InvestingPro Tips, analysts anticipate continued sales growth in the current year.
CyberArk’s fourth-quarter results were robust, demonstrating better-than-anticipated growth, profitability, and FCF. Despite facing a foreign exchange headwind of approximately $5 million and some weakness related to Federal accounts, which represent about 5% of its revenue, CyberArk managed to grow effectively. JPMorgan anticipates this trend to continue through FY25, with guidance suggesting an ARR growth of around 21% year-over-year at the midpoint for FY25, which the firm considers to be a conservative estimate. This optimism is reflected in the broader analyst community, with 19 analysts recently revising their earnings estimates upward, as reported by InvestingPro. The company maintains a strong financial position, holding more cash than debt on its balance sheet.
The guidance also indicates that CyberArk’s operating margin and FCF are expected to continue to improve as the company scales. JPMorgan’s positive outlook is further supported by the integration and performance of Venafi, a recent addition to CyberArk’s business model. The expectation is that Venafi’s growth will align with CyberArk’s core growth rates in the coming years.
JPMorgan has placed CyberArk on a positive Catalyst Watch following the fourth-quarter 2024 earnings and anticipates that the analyst day on February 24 could provide additional positive catalysts for the stock. The firm remains confident in CyberArk’s ability to execute at a high level and has included the stock on their Analyst Focus List, adjusting estimates and the price target to reflect the improved results and outlook.
In other recent news, CyberArk Software has reported impressive first-quarter results for fiscal year 2025, with a 43% increase in quarterly revenue, reaching $317.6 million, surpassing the anticipated $305.3 million consensus. The company’s Annual Recurring Revenue (ARR) also grew by 50% year-over-year, amounting to $1,215 million. Non-GAAP earnings per share were $0.98, exceeding the consensus estimate of $0.79. Despite these strong financial results, CyberArk maintained a conservative outlook for fiscal year 2025, slightly raising its guidance by $5 million. BofA Securities reiterated a Buy rating with a $500 price target, while Cantor Fitzgerald increased its price target to $420, reflecting confidence in CyberArk’s performance and product portfolio. KeyBanc Capital Markets maintained an Overweight rating with a $425 target, emphasizing CyberArk’s focus on non-human identities and strong execution. RBC Capital Markets also reiterated an Outperform rating, highlighting the company’s robust growth in organic subscription Net New Annual Recurring Revenue. Additionally, CyberArk’s integration of acquisitions Venafi and Zilla is progressing well, contributing to its strategic goals.
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