CyberArk Software Ltd. (NASDAQ:CYBR) recently announced preliminary results for second-quarter 2017.
The company projects second-quarter 2017 revenues in the range of $57–$57.5 million, down from the previous guidance of $61–$62 million. The Zacks Consensus Estimate is currently pegged at $61.87 million. License revenue is anticipated in the range of $30–$30.5 million. Non-GAAP operating income is expected to be in the range of $8.5–$8.9 million, down from the earlier guidance of $10.9–$11.7 million.
CyberArk provided not-so-encouraging guidance for the second quarter, due to lower-than-expected business in Europe and the Middle East (EMEA). Udi Mokady, CEO of CyberArk, said, "The primary reason for our revenue shortfall was our performance in EMEA, where certain deals that we anticipated would close did not close by the end of the quarter."
The company also predicted cash flow from operations to be around $29 million for the first six months of 2017. As of Jun 30,, cash, marketable securities and short term deposits are expected to amount $283 million approximately.
Notably, the company is scheduled to report its full financial results on Aug 8, 2017.
Price Performance
The stock has underperformed the Zacks categorized Security industry in the year-to-date period. While the industry has gained 23.2%, CyberArk has returned just 12.1%.
Last Words
CyberArk is an Israeli company that specializes in protecting accounts from cyber-attacks. The company offers several products that protect passwords, close loopholes in the security system and secure cloud-based assets.
While maintaining its earnings streak for the 11th consecutive quarter, CyberArk reported better-than-expected first-quarter 2017 results. However, in the last two quarters, the company reported the slowest revenue growth rate of around 25% since it was enlisted in Sep 2014. Prior to this, CyberArk witnessed more than 35% revenue growth every quarter.
Moreover, intense competition from peers such as CA Inc. (NASDAQ:CA) and Microsoft Corp. (NASDAQ:MSFT) and an uncertain macroeconomic environment add to its woes.
Given a healthy security market, we are optimistic about the company’s product lineup, deal wins and investment plans, which will boost results in the long run. Furthermore, CyberArk’s expansion strategy through acquisitions is encouraging. Investments in product suite and go-to market are the other positives for the company.
Currently, CyberArk carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector is Applied Materials, Inc. (NASDAQ:AMAT) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Materials has a long-term expected EPS growth rate of 16.6%.
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