On Thursday, DA Davidson adjusted its outlook on CyberArk Software (NASDAQ:CYBR), reducing the stock price target to $275 from the previous $300 while reaffirming a Buy rating on the company's shares.
The adjustment follows CyberArk's first-quarter performance, which showed strong operational profitability and free cash flow (FCF), although annual recurring revenue (ARR) growth was less pronounced compared to previous quarters.
CyberArk reported an "upside across the board" for the first quarter, with significant improvements in operational profit and FCF. The company's ARR growth forecast for the calendar year 2024 (CY24) was slightly increased, moving from a range of 25-27% year-over-year to 26-28%. Additionally, the FCF margin guidance for CY24 was revised upward, from an initial projection of 9-10% to a new range of 12-13%.
The firm highlighted CyberArk's continued strength in the market, noting the company's reinforcement of its position as a leading identity security platform. This quarter's results and the updated guidance for CY24 were characterized as strong indicators of the company's performance.
DA Davidson expressed confidence in CyberArk's potential for the remainder of the year, anticipating that the company is likely to exceed estimates as the year progresses. Despite the decrease in the price target, the firm's outlook on CyberArk remains positive, with an ongoing Buy recommendation for the company's stock.
InvestingPro Insights
As CyberArk Software (NASDAQ:CYBR) continues to navigate the competitive landscape of identity security, recent data from InvestingPro underscores certain financial metrics that are particularly noteworthy.
With a market capitalization of $9.88 billion and a high gross profit margin of 79.51% in the last twelve months as of Q4 2023, the company demonstrates a strong ability to generate revenue over its costs. Moreover, CyberArk has achieved a substantial revenue growth rate of 27.07% over the same period, signaling robust business expansion.
InvestingPro Tips highlight that CyberArk is expected to see net income growth this year and maintains impressive gross profit margins, which aligns with the positive outlook from DA Davidson. Still, it is important to note that the company has been trading at high valuation multiples, with a Price / Book ratio of 12.41.
Analysts predict profitability for CyberArk this year, which could further justify the company's current valuation levels. For investors seeking comprehensive analysis and additional insights, there are over 10 InvestingPro Tips available, which can be accessed for CyberArk at Investing.com. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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