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3 Cyberark Bulls Share Takeaways From Q1 Print

Jayson Derrick

IT security company Cyberark Software Ltd (NASDAQ: CYBR) reported first-quarter results Tuesday that arrived better than expected and prompted several Street analysts to turn incrementally bullish on the stock.

The Analysts

Wedbush's Daniel Ives maintained an Outperform rating on Cyberark with a price target lifted from $140 to $145.

Mizuho Securities' Gregg Moskowitz reiterated a Buy rating with a price target lifted from $135 to $140.

Guggenheim's Imtiaz Koujalgi reiterated a Buy rating and $136 price target.

Wedbush Sees 'Clear Highlight' In Q1

Cyberark reported yet another beat-and-raise quarter against already "lofty expectations," Ives said in a Tuesday note.

The "clear highlight" from the report was the 43-percent growth in deferred revenue, which easily topped expectations, the analyst said. Billings growth — a key focus for investors — also outperformed versus expectations, rising 37 percent year-over-year, he said. 

Cyberark appears to be benefiting from enterprises recognizing the "sophisticated threat landscape" and moving toward privileged account management solutions at a quicker pace, Ives said.

Mizuho: Key Data Points

Cyberark noted in its earnings report that it added 150 new customers, which brings the total count to around 4,600, Moskowitz said in a Tuesday note.

The number came in slightly lower than expected, but the company said it is in the process of formalizing a mid-market sales strategy, the analyst said. 

View more earnings on CYBR

Cyberark saw strength across many regions, including 41-percent year-over-year growth in the Americas and 45-percent growth in Asia Pacific, Moskowitz said. While EMEA revenue slowed to a 16-percent year-over-year growth rate, this may be due to a strong fourth quarter, when many companies rushed to sign large deals before the close of the year, he said. 

Related Link: 'We See Room For Further Outperformance': CyberArk Analysts Bullish After Q4 Earnings Beat

Guggenheim: What To Monitor, What's Controversial

Cyberark reported a "clean" quarter, but multiple metrics should be monitored by investors moving forward, Koujalgi said in a Tuesday note.

They are:

  • EMEA growth slowed from 37 percent in fiscal 2018 to 16 percent.
  • New customer growth inflected in 2018, but slowed to a flat pace year-over-year in the first quarter.
  • Add-on deal sizes were lower year-over-year.
  • The unclear impact of new pricing bundles, as customers appear to be buying more products upfront.

A "controversial" takeaway from the quarter was a lighter headline beat compared to the prior three quarters, the analyst said.

For example, revenue beat expectations by 3.8 percent in the first quarter versus an average of 8.2 percent in the past four quarters, Koujalgi said.

This could be seen as a "step down" in business, although "more normal" performance in the EMEA region likely would have resulted in a stronger beat, the analyst said. 

Price Action

Cyberark shares were trading up by 2.16 percent at the time of publication Wednesday. 

Related Link: CyberArk 'More Broadly Adopted As Security,' Morgan Stanley Says

Latest Ratings for CYBR

Date Firm Action From To
May 2019 Maintains Overweight
May 2019 Maintains Buy
May 2019 Maintains Buy Buy

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