How The Pending Palo Alto Deal Rewrites The Story Behind CyberArk Software's Valuation

CyberArk Software’s fair value has been reaffirmed at $485.47, even as modest adjustments to revenue growth and discount rate reflect a more nuanced view of risks and opportunities surrounding the pending acquisition of Palo Alto Networks. Street research points to stronger revenue potential at CyberArk within a larger AI-driven security platform, tempered by integration and execution uncertainties that warrant only incremental adjustments to growth and required returns. Stay tuned to see how you can track these changing assumptions and the evolving deal story as new data points emerge.

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🐂 Bullish takeaways

Citizens JMP points to a “recognized” positive response to Palo Alto Networks’ planned acquisition of CyberArk, arguing that the deal provides a strong strategic rationale and long-term benefits that support CYBR’s growth prospects within a broader AI security platform.
Citizens JMP also points to favorable industry feedback and early research data that suggests Palo Alto is well positioned to capitalize on AI-driven security demand, a backdrop that analysts say underpins CyberArk’s long-term revenue potential and helps support its reaffirmed fair value.
Canaccord, despite downgrading the stock’s rating, raised its price target for CyberArk from $440 to $502, indicating that the company, based on its analysis, continues to see solid value creation and execution momentum recognized in the acquisition terms.

🐻 Bearish Takeaways

Citizens JMP downgraded CyberArk to Market Perform from Outperform, citing the impending acquisition of Palo Alto and indicating that, with limited opportunity for a superior offer, much of the upside potential is already reflected in the current takeout valuation.
Canaccord shifted CyberArk to Hold from Buy or Speculative Buy while raising its target to $502. This underlines a more cautious view that the near-term upside is limited by deal mechanics rather than operational misexecution.
DA Davidson signals an outflow from CyberArk to peers like Varonis during the announced acquisition, a reminder that some investors are turning away from CYBR based on the view that the standalone high growth, high revaluation phase is largely priced into the agreed transaction value.

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NasdaqGS:CYBR 1-year stock price chart

Canaccord downgraded CyberArk to Hold from Buy and raised its price target to $502 from $440, arguing that the pending acquisition of Palo Alto Networks limits further stock price appreciation.
CyberArk launched general availability of its Secure AI Agents Solution and added privilege controls to its Identity Security Platform to help protect the rapidly growing identities of AI agents in SaaS, cloud and developer environments.
The company has expanded its Machine Identity Security portfolio with comprehensive detection, centralized visibility, risk dashboards, certificate management and policy enforcement to address the increase in machine identities driven by AI and cloud adoption.
CyberArk has scheduled a special shareholder meeting on November 13, 2025 in Petach Tikva, Israel, where investors will vote on the proposed merger of Palo Alto Networks and related transactions.

The discount rate has increased slightly from 10.78% to 10.83%, implying a modestly higher required rate of return and a marginally lower present value of future cash flows.
Revenue growth increased slightly to 18.60%, up from 18.56%, reflecting a marginally stronger revenue outlook.
The net profit margin fell slightly from 4.08% to 3.81%, indicating somewhat more conservative assumptions about near-term profitability.
The forward price-to-earnings ratio rose modestly from 394.5x to 423.1x, suggesting a higher valuation multiple on forward earnings, despite the small decline in margin expectations.
Fair value remains unchanged at $485.47, as offsetting adjustments to the growth, margin and discount assumptions in the updated model are offset.

Narratives form the story behind the figures and allow investors to explain in clear language why they think a company will grow, how turnover, profit and margins can evolve, and what that means for fair value. On Simply Wall St’s Community page, millions of investors use Narratives to connect a company’s business story to a financial forecast, compare fair value to the current share price, and receive dynamic updates when new news or earnings arrive.

To stay up to date with the full story, visit the Simply Wall St Community and follow the story on CyberArk Software:

How AI-powered Identity Security, Machine Identities, and Secrets Management are shaping CYBR’s revenue growth and margin expansion potential.
What the deals with Venafi, Zilla Security and Palo Alto Networks could mean for CYBR’s long-term upside potential, integration risk and fair value relative to its price.
How changing analyst forecasts, macro conditions and cybersecurity threats could shift the assumed 19.9% revenue CAGR, future earnings per share and approximately 398x 2028 price/earnings.

Read the full CyberArk story on Simply Wall St

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Companies discussed in this article include CYBR.

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