CyberArk Software Ltd. CYBR has delivered a stellar performance in 2024, posting a 45% gain year to date (YTD). This robust performance significantly outpaced the broader Zacks Computer and Technology sector’s 35.5% gain and the S&P 500’s 28.2% gain, reinforcing the sector’s position as a cybersecurity standout .
CYBR stock has also outperformed the Zacks Computers – IT Services sector and its top cybersecurity peers, including Palo Alto Networks, Inc. PANW, Juniper Networks, Inc. JNPR and Check Point Software Technologies Ltd. CHKP. YTD, the sector is up 17.1%, while shares of Palo Alto Networks, Juniper Networks, and Check Point Software are up 36.4%, 27.7%, and 22.8%, respectively.
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CyberArk’s robust YTD rally reflects investor confidence in its identity security offerings and strategic initiatives. The company’s impressive quarterly results, rapid annual recurring revenue (ARR) growth and successful transition to a subscription-based model contributed to the outperformance.
However, the stock’s high valuation raises questions about its near-term upside potential. This is why holding CyberArk stock makes sense for now.
The core of CyberArk’s success lies in its dominance of the identity security market. As cyber threats become more sophisticated, companies are doubling down on their privileged access management and Zero Trust initiatives. CyberArk solutions, such as the Zero Standing Privilege approach, align with these industry trends and ensure their relevance in an evolving threat landscape.
The strategic $1.54 billion acquisition of Venafi, a leader in machine identity management, strengthens its position. This move expands CyberArk’s reach into machine-to-machine security and complements its core human identity offering. While integration issues exist, the long-term potential to expand the addressable market and improve annual recurring revenue growth (ARR) makes this acquisition a compelling growth driver.
CyberArk’s strong financials underscore its operational resilience. In the third quarter of 2024, the company posted a 26% year-over-year revenue increase to $240.1 million, along with a non-GAAP operating margin of 14.7%, up 590 basis points. These results exceeded expectations, demonstrating CyberArk’s ability to balance profitability with growth.
The company raised its full-year 2024 revenue guidance to $983-$989 million, indicating robust 31% growth at the midpoint. A key highlight was the 31% year-over-year increase in ARR to $926 million, driven by a 46% increase in subscription ARR. This growth reflects the strong adoption of CyberArk’s identity solutions and provides a stable view of revenue in the future.
