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CyberArk (CYBR) Up 28% YTD: Is the Stock Still Worth Buying?

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CyberArk Software, Ltd. (CYBR - Free Report) has shown impressive resilience and growth in 2024, with its stock price climbing 28.5% year to date (YTD). This stellar performance underscores investors' confidence in the company's strong fundamentals despite the broader economic uncertainties.

CyberArk's surge has outpaced not only the Zacks Computer – IT Services sector, which has risen 1.6% over the same period, but also the broader Zacks Computer and Technology sector and the S&P 500, which have advanced 20.7% and 16.5%, respectively.

This significant outperformance reflects CyberArk's continued success in expanding its product offerings, securing high-value deals and maintaining robust financial growth. But with such impressive gains already on the board, the question remains — Is the CYBR stock still worth buying?

YTD Price Return Performance

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Image Source: Zacks Investment Research

Positive Industry Trends

The increasing frequency and sophistication of cyberattacks have driven demand for robust cybersecurity solutions, a trend that plays directly into CyberArk's strengths. As more businesses shift to cloud computing, the need for stringent security protocols has never been higher. CyberArk, with its deep expertise in identity and access management, is well-positioned to capitalize on this demand.

The global identity and access management market is projected to grow significantly, from $20.41 billion in 2024 to $59.52 billion by 2033, reflecting a CAGR of 12.63%, according to a Precedence Research report. This growing market presents a lucrative opportunity for CyberArk to continue expanding its footprint, especially as companies become increasingly aware of the risks associated with inadequate security measures in a cloud-centric world.

Portfolio Strength Aids Customer Growth

CyberArk’s success isn’t just about being in the right market at the right time. It’s also about offering the right products. The company has consistently enhanced its portfolio through both innovation and strategic acquisitions, making it a go-to provider for enterprises looking to bolster their cybersecurity defenses.

CyberArk’s Privileged Access Management solutions, which help organizations monitor and manage access to critical systems, have become increasingly popular, especially in hybrid work environments. The company’s acquisition of C3M has further bolstered its capabilities, particularly in cloud security, by adding tools for identifying security risks and monitoring cloud activity. The pending acquisition of Venafi, a leader in machine identity management, is set to enhance CyberArk’s offerings even further, providing a comprehensive platform for securing machine identities.

These strategic moves have not only broadened CyberArk’s product suite but also contributed to impressive customer growth. In the second quarter of 2024 alone, CyberArk added 245 new customers, with significant growth in clients generating more than $100,000 and $500,000 in annual recurring revenues.

Expanding Market Reach Through Partnerships

Another key driver of CyberArk’s growth is its strategic partnerships with tech giants like Microsoft (MSFT - Free Report) , Amazon’s (AMZN - Free Report) Amazon Web Services (“AWS”) and Alphabet’s (GOOGL - Free Report) Google Cloud. By integrating its solutions with Microsoft’s Azure Active Directory, CyberArk enhances its ability to secure cloud environments, offering robust identity management solutions across various IT ecosystems.

Similarly, its collaboration with Amazon allows seamless integration of CyberArk’s security solutions with AWS’ cloud infrastructure, ensuring that customers can protect critical workloads effectively. The partnership with Alphabet’s Google Cloud further strengthens CyberArk’s position in the hybrid cloud security market, offering advanced tools to safeguard digital assets.

These partnerships not only expand CyberArk’s market reach but also provide customers with comprehensive, integrated security solutions, making CyberArk an indispensable player in today’s cybersecurity landscape.

Robust Financial Performance & Impressive Projections

CyberArk’s financial performance has been equally impressive. Despite the challenging macroeconomic environment, the company has consistently exceeded earnings expectations, with an average surprise of 89.2% over the last four quarters. In the second quarter of 2024, CyberArk reported a 24% year-over-year increase in revenues and an 18-fold jump in non-GAAP earnings per share, highlighting its strong market position.

Analysts remain bullish on CyberArk’s prospects. The Zacks Consensus Estimate for the current and next fiscal years suggests robust growth in both revenues and earnings. Moreover, CyberArk’s long-term earnings growth rate is projected at 33.40%, surpassing the industry average of 18.7%.

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Technical Indicators Signal a Buy

CyberArk’s shares are trading above their 50-day and 200-day moving averages, a bullish signal that could indicate further upward momentum in the short term.

Moving Average

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Image Source: Zacks Investment Research

Conclusion: The Right Time to Buy

With its strong market position, innovative product offerings, strategic partnerships and impressive financial performance, CyberArk is well-equipped to continue its growth trajectory. The stock’s bullish technical indicators, including its trading above the 50-day and 200-day moving averages, further support the case for continued upward momentum.

CyberArk’s ability to navigate the challenges of the cybersecurity landscape while consistently delivering strong results makes it a compelling buy for investors looking to capitalize on the growing demand for cybersecurity solutions. Given these factors, now is an opportune time to invest in this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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