Why Piper Jaffray Isn't Buying CyberArk's Quarter

In a report published Wednesday, Piper Jaffray analyst John Edwards maintained a Neutral rating on

, while raising the price target from $54 to $58. CyberArk reported robust 2Q results, with revenues of $36.4 million, exceeding the high-end of the guidance range, while license revenue increased over 100 percent year on year. A higher mix of appliances resulted in reduced gross margins, which declined 83.5 percent, quarter on quarter. The company's 3Q guidance indicating flat revenues quarter on quarter appears to be conservative. "Management guided for Q3 revenue of $36-37M (cons $34.3M), which implies revenue will remain flat q/q. While Q3 is typically a seasonally stronger quarter than Q2, we believe the guidance reflects some conservatism," analyst John Edwards mentioned. The company also announced its acquisition of Cybertinel, a 20-person firm based out of Israel and offering "a signature-less endpoint security platform" that can uncover zero-day attacks by analyzing data collected from invisible agents residing on the endpoint. CyberArk intends to integrate the acquired technology into its existing products. The transaction is not expected to have a material impact on the 3Q15 or full year results, the Piper Jaffray report mentioned. "We are increasing our target multiple due to multiple expansion in the space, coupled with our increased revenue growth assumptions," the report added.