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CyberArk Software Ltd. (NASDAQ:CYBR): Is It A Smart Long Term Opportunity?

Simply Wall St

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After CyberArk Software Ltd.’s (NASDAQ:CYBR) earnings announcement on 31 December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by -27% in the upcoming year compared with the higher past 5-year average growth rate of 30%. With trailing-twelve-month net income at current levels of US$47m, we should see this rise to US$34m in 2020. Below is a brief commentary around CyberArk Software’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for CyberArk Software

Can we expect CyberArk Software to keep growing?

The longer term view from the 20 analysts covering CYBR is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of CYBR’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NasdaqGS:CYBR Past and Future Earnings, March 25th 2019

By 2022, CYBR’s earnings should reach US$74m, from current levels of US$47m, resulting in an annual growth rate of 18%. EPS reaches $2.52 in the final year of forecast compared to the current $1.3 EPS today. However, the near term margins may change heading into 2022, from the current levels of 14% to 13%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For CyberArk Software, I’ve put together three relevant factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is CyberArk Software worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CyberArk Software is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CyberArk Software? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.