We recently published a list of 10 Best Business Software Stocks to Buy Now. In this article, we look at how CyberArk Software Ltd. (NASDAQ:CYBR) compares to other enterprise software stocks.
Enterprise software is integral to the functioning of modern businesses, offering a range of applications designed to streamline and optimize various essential activities. These include enterprise resource planning (ERP), customer relationship management (CRM), business intelligence (BI), supply chain management (SCM), and more. The market is structured around eight core segments based on the functionality of the software: Business Intelligence Software, Content Management Software, Customer Relationship Management Software, eCommerce Software, Enterprise Performance Management Software, Enterprise Resource Planning Software, Supply Chain Management Software, and other specialized enterprise software solutions. The evolution of the market is driven by several key factors. Businesses across the globe are increasingly adopting digital transformation strategies, fueling the demand for flexible, scalable, and easy-to-use software solutions. Cloud-based software, or Software as a Service (SaaS), has become particularly popular due to its customizability and easy integration with other systems. Businesses are also looking for software that can help them reduce costs, streamline operations, and improve their overall performance.
Geographically, the United States leads the enterprise software market, driven by high demand for cloud-based solutions and rapid adoption of artificial intelligence (AI) and machine learning technologies. In Europe, the market is driven by the need for digital transformation and regulatory compliance such as the General Data Protection Regulation (GDPR). The Asia-Pacific region is experiencing growth due to increasing adoption of cloud-based solutions and the rise of small and medium-sized enterprises (SMEs). In China, the market is dominated by domestic companies due to government restrictions on foreign companies, while in India, the market is benefiting from the proliferation of mobile devices and startups. The Latin America market is driven by the need for regulatory compliance and efficient business management solutions.
The enterprise software market is influenced by several macroeconomic factors, including GDP growth, technological innovation, and government regulations. As businesses around the world strive to remain competitive in an increasingly digital world, demand for advanced software solutions continues to grow. The growing adoption of cloud-based platforms is particularly important as businesses seek to increase flexibility while reducing operational costs. Additionally, government regulations play a critical role in shaping the market, influencing the adoption of certain software types and the ability of foreign companies to operate in specific regions.
According to Statista, the enterprise software market is poised to witness remarkable growth in 2024, with revenues expected to reach a whopping $295.20 billion. At the forefront of this expansive market is Customer Relationship Management (CRM) Software, which alone is expected to generate $89.30 billion in revenue. The overall market is expected to continue its upward trajectory with a compound annual growth rate (CAGR) of 6.35% from 2024 to 2029, resulting in a projected market volume of $401.60 billion by the end of the forecast period. A key metric within the industry, average expenditure per employee, is expected to reach $82.91 in 2024, underscoring the growing importance of enterprise software in driving business efficiency and productivity. The United States is the dominant player in the global market, with a projected revenue of $150.50 billion in 2024, reflecting its leadership in innovation and technology adoption.
Enterprise Resource Planning (ERP) is increasingly recognized as a key growth area within the broader Enterprise Software and Software-as-a-Service (SaaS) markets, particularly as more companies upgrade their financial applications. This critical functional area has been somewhat neglected in recent years, but is now gaining attention as companies look to improve their financial management capabilities. Unlike other software segments where the public cloud has become the dominant delivery model, ERP is expected to see a more balanced adoption of both public and private cloud solutions within the enterprise software landscape. This hybrid approach allows companies to leverage the flexibility and scalability of the public cloud while retaining the security and control offered by private cloud environments, which is critical for managing sensitive financial data and complex business processes. A key segment of the enterprise software industry, the public cloud ERP market includes applications for finance, planning, procurement, and asset management and is poised for significant growth. According to IDC data, this market is expected to grow from $36 billion in 2021 to an impressive $73 billion in 2026, representing a strong 15% CAGR. Despite its potential, ERP has been slower to migrate to the cloud compared to other types of enterprise software, with approximately 48% of ERP systems still running on-premise. However, as large enterprises increasingly seek deeper insights into their operations and the ability to scale efficiently, the push for cloud-based ERP solutions is accelerating. This shift is being driven by the need for more integrated and flexible systems that can adapt to the changing demands of modern businesses.
Given its robust growth prospects and the critical role that enterprise software plays in today’s business landscape, this article will explore the 10 best enterprise software stocks to buy now. These companies are well-positioned to benefit from the ongoing digital transformation and increasing reliance on advanced software solutions by businesses worldwide. Investing in these stocks offers an opportunity to participate in the growth of a dynamic and essential industry.
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CyberArk Software Ltd. (NASDAQ:CYBR)
Average analyst price target: 5.22%
Average analyst price target: $290.83
Coming in at number ten on our list of the ten best enterprise software stocks to buy right now is CyberArk Software Ltd. (NASDAQ:CYBR). CyberArk Software Ltd. (NASDAQ:CYBR) has an average analyst price target of $290.83, indicating an upside potential of 5.22%. Analysts view CyberArk Software Ltd. (NASDAQ:CYBR) as a strong performer, driven by its growing cloud business and increasing importance of privileged access management (PAM). Despite the tough market conditions, CyberArk Software Ltd. (NASDAQ:CYBR) remains resilient, benefiting from rapid growth in machine identity. While the stock isn’t cheap, analysts see the company’s robust performance and future growth potential as attractive. The recent acquisition of Venafi is seen as a strategic move that strengthens its position in machine identity management, generates significant revenue, and expands its market. As competition from Okta and others increases, CyberArk Software Ltd.’s focus is on (NASDAQ:CYBR) sees privileged access controls and identity security as a key differentiator.
For its last earnings report announced on August 8, CyberArk Software Ltd. (NASDAQ:CYBR) delivered strong results. The company reported normalized EPS of $0.54, beating estimates by $0.14. CyberArk Software Ltd. (NASDAQ:CYBR) also reported revenue of $224.71 million, beating expectations with a surprise of $5.10 million. CyberArk Software Ltd. (NASDAQ:CYBR) has delivered an impressive year-to-date price return of 27.83%, significantly outperforming the S&P 500’s gain of 16.45%. This strong performance underscores the market’s confidence in CyberArk’s growth potential and strategic positioning in the cybersecurity sector.
Next Century Growth Small Cap Strategy stated that next regarding CyberArk Software Ltd. (NASDAQ:CYBR) in the first quarter 2024 investor letter:
“CyberArk Software Ltd. (NASDAQ:CYBR) is a leading identity security platform that helps enterprises protect themselves from cyberattacks. CYBR specializes in privileged access management (PAM) and offers a full suite of identity security products. As cyberattacks become more sophisticated, enterprises of all sizes are having to upgrade from legacy solutions such as single sign on (SSO) and multi-factor authentication (MFA), resulting in strong demand for CYBR’s solutions. Given this end-market backdrop, the company is growing revenues by >20% and delivering solid margin expansion.”
General CYBR is in 10th place on our list of the best enterprise software stocks to buy. While we recognize CYBR’s potential as an investment, our conviction is based on the belief that some AI stocks hold more promise for delivering higher returns and in a shorter time frame. If you’re looking for an AI stock that shows more promise than CYBR but trades at less than 5x earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider Monkey.
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