DA Davidson struck a more optimistic tone on CyberArk Software Ltd (NASDAQ:CYBR) after the company delivered another strong quarter fueled by subscription growth and accelerating recurring revenue.
Analyst Rudy Kessinger maintained a Buy rating on CyberArk Software and raised the price forecast from $518 to $573 on Wednesday.
Kessinger updated his model after CyberArk’s fourth-quarter report, noting the company delivered record subscription and total net new ARR levels, both rising roughly 20%–30% organically year-over-year.
The analyst rerated the stock to align with his valuation of Palo Alto Networks Inc (NASDAQ:PANW).
Subscription Growth Drives Results
He said CyberArk posted solid quarterly results, with revenue of $372.7 million and adjusted EPS of $1.33, slightly below his profit expectations but supported by strong subscription growth.
Subscription revenue climbed 28% Y/Y to $310.5 million, making up 83% of total revenue, while recurring revenue reached 96% of the total.
ARR Momentum Remains Strong Despite Deal Uncertainty
Kessinger highlighted strong ARR momentum, with total ARR rising 23% to $1.44 billion and subscription ARR growing about 29% organically.
Net new ARR also rebounded sharply compared with the prior quarter, driven by accelerating subscription contributions.
The analyst noted operating margins came in slightly lower than expected due to higher costs, but free cash flow exceeded forecasts.
With CyberArk awaiting its pending acquisition by Palo Alto Networks, the company will not hold an earnings call or provide updated guidance, though Kessinger still revised his forward estimates and reiterated his bullish stance.
The analyst projected first-quarter revenue of $378.6 million and EPS of $1.35.
Price Action: CYBR shares were trading lower by 1.61% to $400.46 at last check Thursday.
Image: Shutterstock
Recent Comments