Wells Fargo Starts Cyberark At Market Perform, Sees 'Attractive' Customer Base

In a report published Friday, Wells Fargo analyst Powell initiated coverage of

with a Market Perform rating. The valuation range has been estimated at $60-$64 per share. Analyst Powell believes that the company has "an excellent product set" and that it is poised to "address a critical attack vector - insider threats and breaches - within the security software space." Cyberark directly addresses the Privileged Access Management (PAM) and Data Loss Prevention (DLP) segments of security. This has been estimated at a $1.4B opportunity "with mid to high teens growth." Powell added that "tangential areas such as analytics, threat intelligence, incident response and other use cases could justify a larger market opportunity." Cyberark's customer base has been growing at a rate of 25 percent annually. Moreover, 30 percent of its customers make repeat purchases each year, while existing customers generate 50 percent bookings. "It is common for a customer's total spend with CYBR to increase to 4x their initial order value in three years," Powell pointed out. Wells Fargo expects the company to generate annual revenue growth of 25 percent for the foreseeable future. "We also would highlight the company's best in class sales and marketing efficiency ratios and attractive operating and free cash flow profile," the report added. Powell said, however, that the market already seems to be "factoring in significant upside to street forecasts."