CyberArk (CYBR) Q1 Earnings: Will It Surprise Investors?

CyberArk Software Ltd (NASDAQ:CYBR) is set to report first-quarter 2017 results on May 11. The company delivered a positive earnings surprise of 25% in the previous quarter. Let's see how things are shaping up for this announcement.

Factors at Play

CyberArk is an Israeli company specializing 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.

The company ended 2016 on a strong note, which is evident from the better-than-expected results it posted in the fourth quarter. According to research firm, Markets and Markets, the cyber security market is expected to touch $170.21 billion by 2020 from $106.32 billion in 2015, expanding at an annual rate of 9.8%. We believe that CyberArk Software is in a favorable position to tap the opportunities. This should reflect in its quarterly numbers

Investments in product suite and go-to-market are other positives for the company.

The company reported the slowest revenue growth rate in the fourth quarter since it was enlisted in Sep 2014. Prior to this, CyberArk had witnessed over 35% revenue growth every quarter.

Moreover, its outlook for the first quarter and full year depicts that the company will remain in mid-20%. This makes us cautious about its growth prospects. Intense competition from peers such as CA Inc. (NASDAQ:CA) and Microsoft Corp (NASDAQ:MSFT). and an uncertain macroeconomic environment add to its woes.

CyberArk Software Ltd. Price and EPS Surprise

CyberArk Software Ltd. Price and EPS Surprise | CyberArk Software Ltd. Quote

Earnings Whispers

Our proven model does not conclusively show that CyberArkwill beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: CyberArk’s ESP is 0.00% since the Most Accurate estimate and the Zacks Consensus Estimate stand at 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CyberArk carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Computer Sciences Corporation (NYSE:DXC) , with an Earnings ESP of +7.06% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Snap Inc. (NYSE:SNAP) , with an Earnings ESP of +42.49% and a Zacks Rank #3

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