Is CyberArk The Next Big Cybersecurity Stock?

CyberArk Software (NASDAQ: CYBR) recently reported phenomenal quarter numbers, passing the $1 billion revenue level for a fiscal year in 2024. The identity security company known for its privileged access management products is growing extremely rapidly and broadening its platform through organic growth and selective acquisitions.

We deconstruct CyberArk’s latest two quarterly reports, its growth drivers, relative performance versus top cybersecurity peers, leading trends and concerns in its market, and technical analysis of its stock performance.

Solid Quarterly Numbers and Rising Profitability

CyberArk finished 2024 on a record-high note for Q4. In Q4 2024, revenue rose to $314.4 million, a 41% year-over-year increase from $223.1 million in Q4 2023. Growth was driven by increasing demand for subscription products – subscription revenue rose 62% year-over-year in Q4 to $243.0 million.

As customers moved more to SaaS and term-license plans, recurring revenue represented 93% of Q4 sales, up from 87% in the previous year.

Annual Recurring Revenue was more than $1.16 billion as of year-end 2024, an increase of 51% year-over-year, or roughly 30% growth on an organic basis, excluding acquisitions. Notably, the subscription portion of ARR was $977 million, 84% of total ARR), highlighting the successful transition from perpetual licenses to recurring subscriptions.

CyberArk’s revenues per quarter have more than doubled during the past two years on a subscription (blue and purple bars) growth pace. Revenues of $314 million for Q4 2024 compare with Q4 2023 revenue of $223 million and Q4 2022 revenue of $169 million.

Practically all of CyberArk’s revenues are recurring these days. YTD momentum was carried forward to Q4. Q3 2024 was already strong, at $240.1 million, up 26% year-over-year). By then, CyberArk had seen eight consecutive quarters of ARR expansion greater than 30% and was exceeding its own expectations.

Perhaps more impressively, profitability has also been on the rise. During Q3, the company posted a GAAP net income of $11.1 million following a net loss last year, and non-GAAP operating margin mushroomed to ~15% from 9% last year.

By Q4, CyberArk reported a larger GAAP operating loss of $31.4 million due to acquisition-related costs and accounting items, yet on an adjusted basis reported $58.7 million of non-GAAP operating income, 19% margin, up from $34.7 million, a 16% margin in Q4 2023.

That indicates that profitability on the underlying basis continued to grow even as the company was investing in growth. For 2024, CyberArk’s revenue grew 33% to $1.001 billion, an important milestone of achieving more than $1B in annual revenue.

The investments the company made in its transition to subscription are starting to bear operating leverage. 2024 non-GAAP operating income was $150.9 million, a 15% operating margin, a huge increase from $33.5 million or a 4% margin in 2023. That is, adjusted operating profits roughly quadrupled year-over-year.

The firm still reports GAAP net losses for the year of –$93.5M mainly because of stock-based compensation and acquisition charges, but the trend is unmistakably toward breakeven and profitability as recurring revenues build.

CyberArk finished 2024 with a healthy balance sheet too, well in excess of $840M of cash and investments, even after the use of cash in acquisitions, giving it some room to continue to invest for growth.

Organic Growth and Upsell of Customers Are Primary Growth Levers

Organic growth remains in focus alongside strong demand for identity security products as organizations adopt “zero trust” architectures.

CyberArk’s flagship privileged access management products are winning new customers across industries, and existing customers are expanding their deployments. This is reflected in the consistently ARR growth of ~30% organically, as an indication of a solid mix of new subscriptions and upsells.

Management reported “strong net new ARR” in recent quarters, an indication that it’s not just renewing existing contracts but adding substantial new business.

In Q3 2024, year-over-year recurring revenue grew 29%, and in Q4 recurring revenue growth sped up to over 40% on an as-reported basis including acquisitions – proof of both strong underlying demand and the tailwind from acquired products. CyberArk has also been recognized as a leader in its niche (e.g. named Leader in the Gartner Magic Quadrant for Privileged Access Management).

Inorganic expansion in the form of acquisitions is yet another lever used by the company to grow its platform and increase incremental revenue.

Most notably, CyberArk closed the acquisition of Venafi on October 1, 2024. Venafi is a leader in machine identity management, digital certificates and key, an adjacent segment to CyberArk’s identity security fundamentals.

The acquisition had a point-for-point impact on CyberArk’s numbers: in Q4 2024, Venafi contributed approximately $41 million of subscription revenue and $6 million of maintenance/services. This was enough to lift total revenue growth in Q4 to 41% (organic, CyberArk had been predicting Q4 growth would have been ~20% without Venafi).

Venafi contributed an enormous $166 million to CyberArk’s ARR as well, bringing total ARR to over the $1B level.

In addition to the numbers, Venafi adds CyberArk’s strengths to protect machine identities (like SSL/TLS certificates, code signing keys, etc.), a fast-growing area of need as businesses increase their utilization of cloud services and automation.

CyberArk’s CEO reported that machine identities are the “fastest growing and most complex” identities in the market place today, and early customer response to the merged CyberArk+Venafi solution has been highly positive. This means the purchase is not only contributing to top-line growth but also making CyberArk’s identity security competitive moat even deeper.

As more and more customers shift to the company’s subscription model, CyberArk is able to cross-sell new modules and add-on services. For instance, a customer who originally purchased core privileged account vaulting would later add endpoint privilege manager, cloud entitlements management, or secrets management for DevOps – all areas CyberArk has expanded into.

The growth of company ARR beating mere customer count growth indicates current customers increasing spending over time, indicating healthy upselling and retention.

Actually, in Q4 2024, 79% of overall ARR was derived from subscriptions (vs. 72% twelve months ago), meaning many have made the move away from older-style maintenance contracts into higher-value subscription models.

CyberArk vs. Okta, Palo Alto, CrowdStrike

CyberArk operates in a highly competitive cybersecurity space, but mostly in a specialized sub-space of identity security and privileged access management. It tends to complement rather than compete with some of the more established cybersecurity peers.

Okta (NASDAQ: OKTA)

Okta’s size is larger than CyberArk’s – Okta’s yearly revenue as of Jan 2025 was about $2.6 billion, up some 15% from the previous year.

Okta expanded 13% in its latest quarter to $682M Q4 FY2025, lower than CyberArk’s 30%+ growth rate.

Okta and CyberArk both operate on identity, but solve different problems – Okta solves for general user identities for application access and CyberArk secures highly privileged accounts and secrets. They are not mutually exclusive at customers.

All that aside, some convergence is afoot e.g., Okta has ventured into identity governance and privileged access requests, and CyberArk’s newer offerings like Secure Web Sessions border on more generic workforce identity.

Microsoft’s Azure Active Directory, now rebranded as Entra ID, is a formidable competitor to Okta and also a competitive threat in the broader identity management market, which both companies need to compete on superior cross-platform capabilities and security features.

Palo Alto Networks (NASDAQ: PANW)

Palo Alto’s revenue was $8.0 billion in Palo Alto’s fiscal 2024, up ~16% from the prior year. Growth is considerably lower in percentage value due to its scale, yet Palo Alto is extremely profitable with excellent free cash flow generation and has been investing considerably in a broad product line (cloud security, security operations, etc.).

Palo Alto doesn’t directly compete with CyberArk on identity security, but it does compete in network, endpoint, and cloud security. But as cybersecurity budgets meet, Palo Alto’s strategy of offering a single platform could indirectly pressure smaller, niche players.

To this point, Palo Alto has not aggressively moved into privileged access management, and in fact, Palo Alto and CyberArk can be complementary.

CyberArk management also likes to call out its “security-first DNA” and leadership in identity security as a differentiator, implying that even platform players like Palo Alto would have difficulty replicating the deep focus

In the market, CyberArk is apt to get embedded into larger security architectures, possibly with Palo Alto products, rather than compete head-to-head.

CrowdStrike

In the most recent quarter reported, CrowdStrike’s revenue was $1.06 billion, up 25% year-on-year. CrowdStrike also mentioned ARR of $4.24 billion (+23% YoY) and healthy non-GAAP profitability.

CrowdStrike’s domain (endpoint/XDR and cloud security) differs from CyberArk’s, albeit with a slight overlap as well – CrowdStrike has an identity threat detection module (from Preempt acquisition) that protects against stolen credentials.

However, CrowdStrike does not offer credential vaulting and session management à la CyberArk. In practice, firms can use CyberArk to secure their highest-level accounts and DevOps secrets, and CrowdStrike to secure hosts and detect breaches. Both are assisted by trends like zero trust.

Performance-wise, CyberArk’s ~30% organic growth is similar to CrowdStrike’s growth, but on a lower revenue base, illustrating that CyberArk’s niche is seeing very high demand. CrowdStrike’s success is proof that there is demand for best-of-breed security tools even when unbundled from a platform – a welcome sign for CyberArk’s focused strategy as well.

Glancing At the Numbers

Financially, CyberArk’s 2024 growth outperformed much of its peer group. Its 33% revenue growth (51% ARR growth ex acquisitions) outperforms Okta’s mid-teens and Palo Alto’s mid-teens growth, and approximates CrowdStrike’s ~30% organic growth.

From a profitability perspective, CyberArk lags the larger players and is just reaching steady non-GAAP profits, whereas Palo Alto and CrowdStrike have huge profits. CrowdStrike, for example, reported over $1.0 in adjusted EPS last quarter and solid free cash flow, and Palo Alto is GAAP profitable after retooling its accounting.

Okta, like CyberArk, was once unprofitable but has become decent non-GAAP earnings in recent years. CyberArk’s rising margins are a plus, but shareholders will watch to see how quickly it can become GAAP profitable and bring its margins in line with peers’ as it continues to grow.

Identity Security & Zero Trust

One of the most significant market trends influencing CyberArk is the industry-wide shift towards zero trust security, which focuses on authenticating everyone and everything. With a zero trust architecture, it’s all about locking down identities and their permissions, and that’s something CyberArk is great at.

Even when IT budgets experience fluctuations, cybersecurity is a priority spend category, and within security, identity-related security is gaining more attention. CyberArk’s management tends to speak in terms of the “mission critical nature of protecting all identities, human and machine” and identifies enduring drivers of demand.

The rapid expansion of machine identities (certificates, service accounts, APIs) is a newer phenomenon; as noted, machine identities are expanding more rapidly than human users in most networks, adding complexity and risk. With its expanded portfolio, CyberArk is taking advantage of this trend.

Growing use of cloud services, DevOps automation, and Internet-of-Things devices all contribute to more identities that need to be safeguarded, and this aids CyberArk’s addressable market.

Cloud Migration and SaaS Delivery

A second wind in the back is that companies are increasingly willing to consume security software as a service.

CyberArk’s initial transition away from perpetual license sales towards subscriptions has positioned it well to surf this trend.

Today, 77% of its Q4 2024 revenue is subscription-based, up from 67% in Q4 2023. This is more recurring, predictable revenue and often higher lifetime value per customer, though near-term recognized revenue might have been lower under subscription accounting.

The fact that CyberArk’s SaaS revenues grew 55% year-over-year organically in Q4, and self-hosted subscriptions grew 72%, reflects strong demand for its cloud-delivered products. With more infrastructure moving to cloud and hybrid environments, CyberArk’s solutions (privilege access to cloud consoles, ephemeral cloud workloads, etc.) are sought after.

The one risk here is that cloud platform providers like AWS, Microsoft, or Google could stretch their own native security features to penetrate into niche markets – e.g., AWS has certain secrets management and Google Cloud has the capability to manage service accounts. But large organizations tend to have multi-cloud and hybrid environments, which is better suited to third-party security offerings that are deployable in heterogeneous environments.

CyberArk’s focus on cloud-agnostic and partnerships (e.g., the partnership with Wiz for cloud identity security) are designed to maintain its relevance in multi-cloud security planning.

Consolidation vs. Best-of-Breed

One of the trends in cybersecurity buying is the controversy over whether to use a suite from one vendor or multiple best-of-breed solutions. Some are rationalizing vendors for convenience (preferring large-platform companies such as Palo Alto or Microsoft), but others are holding to specialty tools for critical needs benefiting specialty companies such as CyberArk or CrowdStrike).

CyberArk’s rapid growth demonstrates that many organizations continue to go with the leading tool for privileged access management, since sensitive that space is. The danger is that a larger vendor incorporates a “good enough” PAM feature into their offerings, and users might choose convenience over CyberArk depth.

So far, CyberArk’s innovations such as adding AI/ML to detect anomalous credential usage, expanding into secrets management for developers and good will place it ahead of “good enough” products. Plus compliance and regulatory requirements for example, finance or government agencies’ requirements for privileged account management, might force companies to seek best-of-breed PAM solutions, and that is a tailwind for CyberArk.

Short-Term & Medium-Term Technical Outlook

CyberArk’s stock has been in a solid uptrend over the past year, but recently entered a consolidation phase.

From mid-2023 to early 2025, CYBR shares nearly doubled in value, which is a reflection of the company’s fundamental momentum.

In fact, the stock hit an all-time closing high of $414.31 on February 13, 2025 – right after the Q4 earnings report. The 52-week high is $421.00, and investors were clearly excited about CyberArk’s growth trajectory at that price level.

After the earnings fever, however, the stock did see a nice pullback. By early March 2025, CYBR had retreated to around the low $300s, trading at $310–$312.

This retreat of 25% from the high appears to be a combination of general market volatility given that most technology stocks gave up some ground in March, and traders taking profits after a big run-up.

Moving Averages

The company is now sitting in between its significant moving averages. After the correction, CYBR dipped below its shorter-term 50-day moving average, roughly $360–$365, but above its longer-term 200-day moving average (around $320).

Being below the 50-day indicates short-term momentum has cooled – indeed, the trend for the past month has been lower – but remaining above the advancing 200-day line indicates the bigger uptrend from a year ago continues to hold.

Short term, the $360-$370 zone (at the 50-day and near swing highs) is now above resistance. Technicians would prefer to see the price break above that level again to confirm a resumption of an uptrend.

On the downside, the 200-day at $320 and the near lows at $310 are a support area – these levels mark prior consolidation points and have thus far attracted buyers. It’s interesting to see that in mid-March the stock did bounce back from the low-$300s support with increasing volume, indicating dip buyers are stepping in.

Relative Strength Index 

After the gigantic rally and subsequent pullback, the RSI indicator has re-settled from wildly high levels to a neutral mid-range reading around RSI ~45–50.

Near the end of February, RSI was likely very high (over 70) after the stock’s surge. This final cooling off placed RSI at ~47, which is not a representation of overbought or oversold. This means that the stock had shaken off the near-term froth.

Below 30 on RSI would be showing oversold (perhaps a long setup), but CYBR is not there – instead it has space to trade either direction as a function of news or opinion.

For investors, a neutral RSI indicates the stock is not held back by too much momentum currently; it can go higher yet if the buyers materialize, or lower yet if the selling persists, without the RSI immediately issuing a contrary signal.

MACD & Momentum

Since the price dropped between February and March, the MACD line dropped below the signal line, thus creating a short-term sell signal.

In fact, technical analysis reports a negative MACD divergence in the 3-month chart. This means that the positive momentum was lost after the peak – that is, the speed of the trend decreased and reversed.

But MACD is a lagging indicator; when it flashes sell, the majority of the pullback had already occurred. Traders now will be on the lookout for signs of a bottom: the MACD histogram has likely been in the negative but can start to trend higher if the stock stabilizes or comes back.

A bullish crossover with the MACD line crossing over the signal line again within weeks would indicate upward momentum is coming back.

Briefly, momentum has faded in the short term, and thus bulls may continue to monitor closely until there is a clear reversal chart pattern or a momentum reversal on the chart.

Levels of Support and Resistance

Near-term support for CYBR appears at $330–$340 per share. There is solid support at around $339, where the stock had high volume trading and rallied during March.

Just below that, the $330-$332 area which is roughly at the 21-day or 1-month moving average and intraday lows of recent times offers additional support. If those near-term supports were to give way, the next good support would be at $310-$320 – $312 was the intraday low recently, and $320 is close to the 200-day average and a round-number level.

On the upside, the first resistance is around $360–$370 (where there is a previous price shelf and the 50-day average). Beyond that, around $380, there is another potential resistance; $380 was roughly an area where the stock tried to bounce back late in February but encountered selling pressure.

If CyberArk shares are able to overcome the top-of-the-$300s barrier, then it would retest the psychological $400 level, and then the all-time high region in the $414–$421 region.

With the stock now closer to its support than to those higher resistance levels, the near-term risk/reward is in favor of buyers from a technical standpoint – i.e., relatively small drop to support versus larger potential gain if it reverses back to resistance.

But breaking below $310 would be a bearish occurrence, while breaking above $370 and $380 would be extremely bullish.

Volume Trends

Volume has been confirming some of these price moves. On the big rally during January and February, volumes were higher on up days, indicating strong buying pressure. For example, when Q4 earnings were announced and the stock moved into new highs, volume was well above average, indicating widespread participation in the move.

In the subsequent pullback, volumes were fairly lighter on many of the down days, which may be more of a profit-taking slide than a fleeing out.

On the positive side, on bounce days recently, volume has surged again. On March 17, when the stock increased ~2%, volume increased modestly over the previous day (some 568,000 shares, or about $197 million’s worth).

If CyberArk’s stock keeps consolidating in the mid-$300s, bulls would want to see volume dry up on the declines and build on advances – that would be a signal of base-forming before the next leg up.

Short-Term Outlook

In the short term over the next several weeks, CyberArk’s stock can remain choppy but range-bound. Recent sell signals and resistance overhead suggest that the stock is likely to consolidate between around $320 and $370 as it digests last year’s significant gains. This range could be seen by traders as a support area where buying on dips would be wise, and potentially scaling out on rallies until a final breakout or breakdown.

The overall market sentiment will also come into play especially if technology/growth stocks rally all across the board, CyberArk should reasonably soon challenge the $370 level; if the market breaks, a retracement to test the $320 support can be expected.

The neutral RSI and relatively modest volumes indicate no absolute need in either direction, so the stock can in effect “mark time” in the short term, allowing fundamentals to catch up with the price.

Medium-Term Outlook

Over the next 3–6 months, the stock’s prospects will be inclined to follow the company’s business performance and overall market trends. With CyberArk’s strong fundamentals and upbeat guidance (the company guided ~31% revenue growth in 2025 at the midpoint, which Wall Street viewed as positive), the medium-term bias is higher provided execution stays on track.

The majority of analysts have firm price targets in the $400+ range for the stock, under the assumption that Q1 and Q2 2025 results will show continued growth and margin expansion.

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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.