On Friday, BofA Securities exhibited confidence in CyberArk Software (NASDAQ:CYBR), a cybersecurity firm, by raising its price target from $300 to $315 while maintaining a "Buy" rating on the stock.
"We highlight CyberArk as an underappreciated cybersecurity company and raise our estimates and PO," said BofA analysts.
The firm underlined several key factors reinforcing their positive outlook. CyberArk's focus on Privileged Access Management (PAM), a crucial area in cybersecurity, is particularly pertinent as over 80% of cyberattacks are attributed to inadequate identity security measures. The company has also successfully shifted to a subscription-based revenue model and extended its offerings beyond core identity services, which is anticipated to fuel continued growth.
Additionally, BofA Securities suggests that CyberArk's financial guidance and mid-term objectives may be understated, leading analysts to foresee substantial upward revisions to future estimates. Such adjustments could result in a favorable reevaluation of the stock's market value.
The valuation of CyberArk in comparison to its industry peers further contributes to the stock's attractiveness, according to BofA Securities. The combination of these positive aspects, along with the potential for a market reassessment, is expected to drive the stock's outperformance. The new price objective of $315 is still grounded on a 12x calendar year 2025 estimated enterprise value to sales ratio.
InvestingPro Insights
Amidst the upbeat sentiment from BofA Securities, real-time data from InvestingPro provides additional context to CyberArk Software's (NASDAQ:CYBR) financial health and market performance. The company's market capitalization stands at a robust $10.57 billion, reflecting its significant presence in the cybersecurity industry. Despite a challenging P/E ratio of -160.69, analysts remain optimistic, as evidenced by 17 analysts revising their earnings upwards for the upcoming period, an InvestingPro Tip that suggests confidence in CyberArk's future profitability.
InvestingPro Data also shows a remarkable gross profit margin of 79.51% for the last twelve months as of Q4 2023, underlining CyberArk's efficiency in generating profits from its revenue. This impressive margin is a testament to the company's strong operational performance and resonates with the "undervalued player" narrative suggested by BofA Securities. Moreover, the company has experienced a significant revenue growth of 27.07% during the same period, indicating a robust expansion in its business activities and market demand for its cybersecurity solutions.
While the company has not been profitable over the last twelve months, InvestingPro Tips highlight that CyberArk is expected to turn a profit this year. This forward-looking insight aligns with the positive trajectory outlined by BofA Securities and may further justify the raised price target. Investors looking for a deeper dive into CyberArk's potential can explore additional insights by visiting InvestingPro, which offers a comprehensive suite of tools and metrics. To enhance their experience, users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a total of 14 InvestingPro Tips to inform their investment decisions.
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