CyberArk Software (NASDAQ:CYBR), the identity security and management firm, has seen its share price soar by more than 30 percent in the last 12 months alone.
With a growing portfolio of security solutions, it seems like the future is bright but has all the good news been priced in?
CyberArk’s ARR Is Foundational To Billion Dollar Revenues
CyberArk has an extremely impressive revenue growth track record, which has caught the eye of top tier investors.
Between 2020 and 2024 alone, CyberArk was able to catapult full-year revenues from $465 million to over $1 billion. In the past 8 quarters alone, management reported year-over-year revenue growth that never dipped below 20%.
The key to unlock success has been subscription-driven ARR rose to over $1.1 billion in 2024 that bodes extremely well for CyberArk in the long run because these subscriptions make up the largest share of the company’s top line.
With the installed base growing, CyberArk offers a very predictable revenue stream that facilitates and finances the launch of non-subscription services.
CyberArk’s losses in Q4 and for the year in total were hefty, but it’s important to take some context into account. On a GAAP basis, CyberArk lost $93.5 million last year, which included a loss of $97.1 million in Q4 after a moderately profitable Q3. On a non-GAAP basis, however, CyberArk reported a net income of $147.5 million for the year.
The leadership team did decide to lay out over $1.5 billion in combined cash and stock last year to acquire machine identity company Venafi in early October. The cash component of the deal was $1 billion, which reduced the company’s reserve of cash, equivalents, short-term deposits and securities to a little over $840 million at the end of 2024.
The Venafi acquisition, though, is expected to expand CyberArk’s addressable market by roughly $10 billion and add significant synergistic value to its existing business. The Board of Directors also signed off on the acquisition of Zilla Security for a cash payment of $165 million.
2025 appears to be another potentially strong year for CyberArk. Management’s full-year outlook suggests total revenue growth of over 30 percent to a bit over $1.3 billion, while ARR is expected to exceed $1.4 billion by the end of the year.
Non-GAAP net income per share is expected to fall in the range of $3.55 to $3.70, up from the $3.03 the company produced in 2024.
CyberArk’s 70% Market Share Is Extraordinary
With cybersecurity becoming a more pressing concern for businesses of all types and sizes every day, market leaders in digital security have significant room for future growth.
CyberArk stands head and shoulders above competition when it comes to market share, enjoying an estimated 70% in the password management space, and purchases like the Venafi one have the potential to cement its footprint beyond user identity management.
It’s also worth noting that CyberArk has integrations with some of the leading cybersecurity majors. For instance, the company highlighted new integrations with both SentinelOne and Microsoft Defender alongside its FY2024 results.
CYBR Is Expensive But Analysts Optimistic
Although CyberArk is growing fast, the stock certainly doesn’t appear cheap at today’s prices. CYBR shares are priced at 16.1x sales, 7.2x book and 73x operating cash flow. The enterprise value is also nearly 570x EBITDA, raising real concerns about whether the stock could be overvalued.
Despite what seems like a very high valuation, Wall Street doesn’t appear to be shying away from CyberArk. Right now, shares trade in the mid-$300 region, and the average analyst price target is about 28% higher at $443.50.
Even the lowest price target standing for CYBR is $328, which would imply a downside of just over 5%. CyberArk maintains a fairly strong buy rating, with 26 of the 29 analysts covering the stock rating it as a buy.
Institutional activity in CYBR also suggests that Wall Street remains bullish on the company’s prospects. In the past six months, institutional investors have bought $26.4 billion of CyberArk shares while selling only $16.3 billion. The spread between buying and selling activity has also widened considerably in recent months.
Through the middle part of 2024, buying activity outpaced selling fairly modestly. Beginning in Q4, though, the volume of shares sold remained fairly steady while buying activity picked up. This trend has held into early 2025, suggesting that large institutional investors probably aren’t overly concerned with CYBR’s price.
Is CyberArk Stock a Buy, Sell or Hold?
CyberArk is a strong Buy according to the 36 analysts covering it who have a consensus price target of $443 per share.
While companies that aren’t actively profitable inherently carry more risk than those that are, CyberArk has a compelling argument behind it. It’s carving a niche out for itself in identity and password security. The Venafi acquisition brought its estimated addressable market to $60 billion, and the company occupies a prime position in the fast-growing cybersecurity space.
On the downside, CYBR share prices aren’t exactly cheap. The stock is trading at high multiples to cash flow, sales and book value, making it something of a risky proposition.
The fact that institutional investors have been buying so aggressively in recent months, though, may suggest that Wall Street’s smart money is lining up behind CyberArk’s long-term growth potential.
Ultimately, CYBR may be a buy for investors with a reasonably high risk tolerance. The track record of strong growth and future opportunities may very well send send share prices higher despite the fact that the stock trades at something of a premium valuation today.
CYBR may not be the most conservative investment out there, but for those on the hunt for growth in cybersecurity stocks, it may very well be a risk worth taking.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.
