CyberArk Beats Q2 Revenue Expectations; Shares Jump 7.5%

Shares of CyberArk Software Ltd. (CYBR) jumped 7.5% after the company beat second-quarter revenue expectations driven by continued momentum, robust industry tailwinds, and excellent execution.

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CyberArk engages in the development, marketing, and sale of access security software solutions. (See CyberArk Software stock charts on TipRanks)

The company reported earnings of $0.01 per share, lower than the previous year’s earnings of $0.42 per share, and missed analysts’ estimates by 1 cent.

On a positive note, revenue for the quarter came in at $117.23 million, up 10% from the year-ago period, and surpassed the Street’s estimate of $116.02 million.

Markedly, CyberArk reported strong bookings across all of its offerings, with the subscription portion of its annual recurring revenue (ARR) growing 128% to $109.5 million and total ARR growing 35% year-over-year to $315 million.

Udi Mokady, Chairman and CEO of the company, said, “With these exceptional results in the second quarter and our continued leadership position in identity security anchored on privileged access, we are increasing the assumption for total bookings growth underlying our guidance framework for the year. As we look ahead, we are in a great position to execute our strategy and deliver long-term growth and profitability.”

CyberArk forecasts third-quarter revenue and adjusted loss to be in the range of $116 – $124 million and $0.19 – $0.02 per share, respectively. The consensus estimate for revenue stands at $117.9 million, and earnings are pegged at $0.05 per share.

Additionally, for the full year, the company projects revenue to fall in the range of $484 – $496 million, while the consensus estimate is $492.6 million. Moreover, full-year earnings are expected to be in the range of $0.01 – $0.26 per share versus the consensus estimate of $0.53 per share.

In response to the strong quarterly performance, Robert W. Baird analyst Jonathan Ruykhaver reiterated a Buy rating on the stock and lifted the price target to $170 (16.2% upside potential) from $160.

Ruykhaver noted that CyberArk is making meaningful progress towards the subscription-based model, and its ARR beat analysts’ expectations. Furthermore, he is impressed by management’s comments around the demand environment and expects continued momentum in demand during the second half of 2021.

The analyst added, “The model clearly has many moving parts with the transition and planned investments creating near-term noise, resulting in a low degree of modeling confidence; however, we believe ARR growth highlights strong underlying trends and continue to like the CYBR story.”

With 6 unanimous Buys, the stock commands a Strong Buy consensus rating. The average CyberArk Software price target of $178.13 implies 21.8% upside potential to current levels. Shares have gained 32.1% over the past year.

Furthermore, CyberArk scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.