Palo Alto Networks to acquire CyberArk Software stock for $25 billion

Investing.com - Palo Alto Networks (NASDAQ:PANW) announced a definitive agreement to acquire CyberArk Software (NASDAQ:CYBR), a $21.9 billion market cap cybersecurity firm, for approximately $25 billion in a cash and stock transaction. InvestingPro data shows CyberArk has maintained impressive revenue growth of 35% over the last twelve months.

The acquisition will allow Palo Alto Networks to "accelerate our platformization by adding a net new platform for identity security," according to Palo Alto Networks CEO Nikesh Arora, who noted it would enable the company to provide "the most comprehensive set of platforms across the industry." CyberArk brings strong fundamentals to the deal, with InvestingPro analysis showing industry-leading gross margins of 78%.

CyberArk shares traded relatively flat following the announcement, after rising approximately 13% during the previous session when The Wall Street Journal first reported on the potential deal.

Palo Alto Networks stock closed down approximately 6%, extending its decline after falling about 5% during the previous session following the WSJ report.

Year-to-date, CyberArk shares have gained approximately 30% while Palo Alto Networks stock has risen about 1%, compared to an 8% increase for the Russell 3000 index.

In other recent news, CyberArk Software has announced its acquisition by Palo Alto Networks in a transaction valued at approximately $25 billion. This deal involves a combination of cash and stock, offering CyberArk shareholders $45 per share in cash and 2.2005 shares of Palo Alto Networks stock for each CyberArk share. Following this announcement, several financial firms have adjusted their ratings for CyberArk. RBC Capital downgraded the stock from Outperform to Sector Perform while raising its price target to $448. Piper Sandler also downgraded CyberArk from Overweight to Neutral, citing the acquisition as a compelling addition to Palo Alto’s portfolio. UBS followed suit, downgrading CyberArk from Buy to Neutral and slightly increasing the price target to $485. Guggenheim removed its price target for CyberArk after downgrading it from Buy to Neutral, highlighting the dependency of the deal on Palo Alto’s stock performance. BTIG also downgraded CyberArk from Buy to Neutral after the acquisition announcement. These changes reflect the market’s response to the acquisition news and its implications for CyberArk’s future.

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