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On Friday, BofA Securities expressed confidence in cybersecurity company CyberArk Software (NASDAQ:), maintaining its buy rating and increasing its price target from $300 to $315.
”We highlight CyberArk as an undervalued cybersecurity company and raise the estimate and PO,” BofA analysts said.
The company highlighted several key factors reinforcing its positive outlook. CyberArk focuses on privileged access management (PAM), a critical area of cybersecurity, because over 80% of cyberattacks are the result of inadequate identity security practices. The company has also successfully transitioned to a subscription-based revenue model and expanded its services beyond its core identity services, which is expected to drive continued growth.
Additionally, BofA Securities suggests that CyberArk's financial guidance and medium-term goals may be undervalued, with analysts expecting future estimates to be revised significantly upward. . Such adjustments may result in a favorable rerating of the market value of the stock.
CyberArk's valuation relative to its industry peers further contributes to the stock's appeal, according to BofA Securities. The combination of these positive aspects and the potential for market rerating is expected to drive stock price outperformance. The new target price of $315 is still based on an estimated enterprise value-to-sales ratio of 12x for calendar year 2025.
Investment Pro Insights
Amidst the upbeat vibe from BofA Securities, real-time data from InvestingPro provides additional context on CyberArk Software (NASDAQ:CYBR)'s financial health and market performance. The company's market capitalization is a healthy $10.57 billion, reflecting its significant presence in the cybersecurity industry. Despite the tough P/E ratio of -160.69, analysts remain optimistic about CyberArk's future prospects, as evidenced by 17 analysts upwardly revising next year's earnings. This is a hint for InvestingPro, which suggests confidence in profitability.
InvestingPro Data also shows CyberArk's trailing 12-month gross margin as of Q4 2023 at an impressive 79.51%, highlighting CyberArk's efficiency in generating profits from revenue. Masu. This impressive margin is evidence of the company's strong performance and resonates with the “undervalued player” narrative suggested by BofA Securities. Moreover, the company has experienced a significant revenue growth of 27.07% over the same period, indicating a steady expansion in business activities and market demand for cybersecurity solutions.
Although the company has not made a profit in the past 12 months, InvestingPro Tips highlights that CyberArk is expected to be profitable this year. This forward-looking insight is consistent with the positive trajectory outlined by BofA Securities and may further justify an increase in price target. Investors interested in learning more about Cyber Ark's potential can explore additional insights by visiting his InvestingPro, which provides a comprehensive suite of tools and metrics. To improve the experience, users can use coupon codes. pro news 24 Get an extra 10% off your annual or biennial Pro and Pro+ subscriptions and unlock access to a total of 14 InvestingPro tips to help you make better investment decisions.
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