Will CyberArk (CYBR) Beat Estimates This Earnings Season?

CyberArk Software (NASDAQ:CYBR) is set to report first-quarter 2018 results on May 3. The question lingering on investors’ mind is whether this provider of information technology security solutions will be able to deliver an earnings surprise this time.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average positive earnings surprise of 19.9%. In the last reported quarter, the company came up with an earnings surprise of 13.9%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

CyberArk’s investments in enriching its product suite and go-to-market sales strategies are benefiting the company and helping it to add customers, thereby boosting revenues.

Notably, the company made a comeback in the previous two quarters, after slowest revenue growth rate of 14% recorded in the second quarter of 2017. The first quarter’s guidance of 16-18% growth rate keeps us optimistic.

The company’s acquisitions continue to contribute to revenues. DevOps security software provider, Conjur, which was acquired by the company in September 2017, has been receiving strong customer response.

CyberArk acquired certain assets of privately-held cloud security provider, Vaultive in March. The integration of Vaultive is expected to enhance the solution to address the needs of diverse users as well as administrators of Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) projects.

However, we are apprehensive about increasing operating expenses related to enhancing its sales competency and enriching the solutions suite. Though these investments will have benefits over the long term, we anticipate these to be a drag on the company’s profitability and the bottom line in the near term.

What the Zacks Model Unveils

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

CyberArk Software has a Zacks Rank #3 and an Earnings ESP of +3.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for the first quarter is pegged at 21 cents per share, indicating 25% decline on a year-over-year basis. Revenues are estimated to be around $69.3 million, indicating 17.4% increase from the year-ago quarter.

Other Stocks to Consider

Here are some companies that you may also want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Arrow Electronics, Inc. (NYSE:ARW) has an Earnings ESP of +0.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here..

Pandora Media, Inc. (NYSE:P) has an Earnings ESP of +4.92% and a Zacks Rank #3.

Fortinet, Inc. (NASDAQ:FTNT) has an Earnings ESP of +2.70% and a Zacks Rank #3.

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