CyberArk Software Ltd: Market-Trouncing Tech Stock Remains Bullish

CyberArk Software Ltd: More Reasons to Be Bullish on This Stock in 2020CyberArk Software Ltd Up 67% in 2019

The cybersecurity space is crowded, but one of the smaller players in this sector is also the most promising. Shares of CyberArk Software Ltd (NASDAQ:CYBR) are up by about 67% in 2019, and thanks to strong third-quarter financial results and a strong outlook, CYBR stock looks even more bullish as we head into 2020.

CyberArk provides “privileged access security,” which is a critical layer of IT security that protects every part of a company’s IT infrastructure.

The Petah Tikva, Israel-based company provides its security products to companies in several fields, including energy, financial services, healthcare, manufacturing, retail, telecommunications, and transportation. (Source: “Investor Presentation November 2019,” CyberArk Software Ltd, last accessed December 16, 2019.)

CyberArk’s 5,000+ customers include:

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  • More than 50% of Fortune 500 companies
  • More than 30% of Global 2000 companies
  • 23 of the top 25 banks
  • 21 of the top 25 energy companies
  • 21 of the top 25 manufacturing companies
  • 20 of the top 25 insurance firms
  • 20 of the top 25 telecom companies
  • 18 of the top 25 pharma corporations

CyberArk Stock Information

Market Cap $4.8 Billion
52-Week Change 75.5%
52-Week High $148.74
52-Week Low $65.90
Shares Outstanding 37.9 Million
Float 37.0 Million
50-Day Moving Average $115.57
200-Day Moving Average $118.15

(Source: “CyberArk Software Ltd (CYBR) ,” Yahoo! Finance, last accessed December 16, 2019.)

Q3 Revenue Up 28%, Net Income Increases 87%

On November 6, CyberArk announced that revenue for its third quarter ended September 30 increased 28% year-over-year to $108.1 million. (Source: “CyberArk Announces Strong Third Quarter 2019 Results,” CyberArk Software Ltd, November 6, 2019.)

CyberArk’s third-quarter generally accepted accounting principles (GAAP) operating income grew 44% year-over-year to $12.7 million. Non-GAAP operating income was $29.4 million, a 40% increase from the same period last year.

The company reported third-quarter GAAP net income of $15.2 million ($0.39 per share), an 88% increase from the third quarter of 2018.

Non-GAAP net income advanced approximately 44% year-over-year to $25.6 million ($0.65 per share).

CyberArk ended the third quarter with $555.1 million in cash, cash equivalents, marketable securities, and short-term deposits. That’s up 35.4% from September 30, 2018.

Business Outlook

For the fourth quarter, CyberArk expects:

  • Total revenue in the range of $125.0 to $127.0 million, for year-over-year growth of 15% to 16%.
  • Non-GAAP operating income between $38.5 and $40.0 million.
  • Non-GAAP net income per share in the range of $0.78 to $0.82.

For full-year fiscal 2019, CyberArk expects:

  • Total revenue in the range of $429.2 to $431.2 million, representing year-over-year growth of 25% to 26%.
  • Non-GAAP operating income in the range of $119.8 to $121.3 million.
  • Non-GAAP net income per share between $2.58 and $2.61.

Analyst Take

CYBR stock continues to be an excellent cybersecurity stock with tremendous long-term growth potential. CyberArk Software Ltd has been able to achieve strong financial results, and that is expected to continue.

Some fear that the ongoing U.S.-China trade war could impede the company’s growth, but since it’s based in Israel, it shouldn’t be negatively affected. 2019 was a solid year for CyberArk stock, and 2020 looks like it will be even better.