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Here’s Why CyberArk Stock Surged 8% on Wednesday

Story Highlights

Cyberark has posted robust results for the second quarter as top-line growth continued for the company. Yet, Cyberark reported a loss during the quarter, which remains a concern.

Information security company CyberArk (NASDAQ: CYBR) reported stronger-than-expected results for the second quarter ended June 30, 2022, as revenue and earnings surpassed consensus estimates. As a result, shares of the company gained almost 8% to close at $149.74 in yesterday’s trading session.

Q2 Results Snapshot

CyberArk posted quarterly revenues of $142.3 million, up 21.4% from the year-ago quarter. Also, the figure comfortably outpaced the consensus estimate of $138.45 million. A massive rise of 144% in subscription revenues was the primary contributor to the overall growth in revenues for the company.

However, the company reported a loss of $0.27 per share compared to earnings of $0.01 per share reported in the previous year. Yet, the figure came in narrower than the consensus estimate of a loss of $0.30 per share.

Some of the key operating metrics of the company also improved from the corresponding quarter of the previous year.

In the second quarter, CyberArk’s annual recurring revenue (ARR) of $465 million represents a growth of 48% from the previous year. Within this, subscription revenue ARR grew an impressive 133% from the prior year to $255 million and made up about 55% of total ARR on June 30, 2022.

Moreover, the company signed 250 new customers during the second quarter of 2022. Notably, 88% of the total license bookings were related to subscription bookings compared to 65% in the previous year.

Company Guidance for Q3 and 2022

CyberArk forecasts revenue to be in the range of $147-$153 million and $589-$601 million, compared to a consensus estimate of $148.3 million and $591.7 million for the third quarter and 2022, respectively.

Meanwhile, loss per share estimates stand between ($0.27) – ($0.14) and ($0.82) – ($0.57), compared to a consensus estimate of a loss of ($0.22) and ($0.73) per share for the third quarter and 2022, respectively.

Is CyberArk a Good Buy?

Wall Street analysts seem optimistic about CyberArk’s prospects.

Overall, the consensus among analysts for CyberArk stock is a Strong Buy based on 13 Buys and one Hold. The CYBR average price target of $172.15 implies an upside potential of 15% from current levels. Shares have gained 10.1% over the past year.

Key Takeaways

CyberArk’s results for the second quarter have been impressive amid growth in revenues and in some of the key operating metrics. The optimism about the company’s prospects can be gauged from the rise in stock price following Q2 results. Furthermore, CyberArk stands to benefit from the overall growth in the cybersecurity sector.

However, profitability concerns continue to plague the company.

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