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Deutsche Bank: CyberArk's Selloff Is 'Overdone'

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Deutsche Bank: CyberArk's Selloff Is 'Overdone'
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  • Cyberark Software Ltd. (NASDAQ: CYBR) has seen an almost 35 percent decline in its share price in the past three months.
  • Deutsche Bank’s Karl Keirstead has upgraded the company from Hold to Buy, while reiterating a price target of $65.
  • Keirstead believes that the recent selloff in the stock was overdone and that the current valuation offers an attractive entry point.

According to Keirstead, the 11 security software companies that presented at Deutsche Bank’s annual Tech Conference appeared “uniformly bullish, with no hints of any 2H15 or 2016 deceleration.”

Most companies also believed that a multi-year budget reset was on the cards, with security having become a “strategic/Board-level priority.” The only aspects that is still being debated is the rate of growth of this spend.

In addition, Cyberark Software “has posted 4 consecutive material beats following the September 2014 IPO,” and Keirstead believes that there was no change in the management’s confident tone at the conference.

“Our field checks imply a growing enterprise focus on governing employee data access and securing the credentials of privileged account users is often a high priority,” the Deutsche Bank report said, while adding that the company was “bullish about growth outside of the banking vertical and the US federal government is very underpenetrated.”

Keirstead believes that the company’s revenue growth guidance for 3Q15 could prove conservative. The stock appears cheap, given that few software companies can boast the level of growth, as well as operating and free cash flows as Cyberark.

Latest Ratings for CYBR

DateFirmActionFromTo
Nov 2016Imperial CapitalUpgradesIn-LineOutperform
Sep 2016Cowen & Co.Initiates Coverage onMarket Perform
Sep 2016Pacific CrestInitiates Coverage onSector Weight

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