Summit Upgrades CyberArk To Buy, Raises Price Target To $50

Summit’s Srini Nandury upgraded the rating for Cyberark Software Ltd CYBR from Hold to Buy, while raising the price target from $30 to $50. The analyst cited compelling valuation and strength in security spending as the reasons for the upward revisions.

Security Spending Environment

Analyst Srini Nandury expects enterprise security spending to continue to be at elevated levels at least in the near term, backed by the desire of enterprise customers to secure their privileged accounts. Security spending had been at heightened levels over two straight years, and was expected to slow. Nandury added, however, that security spending concerns had diminished, following conversations post RSA.

“Enterprises have begun to shift some of the security spending away from the endpoints of the network and toward protecting the core assets within the company. CIOs understand that once hackers penetrate the perimeter, they look to hack privileged accounts (super-user and administrative accounts) to get to the data. Securing privileged accounts then takes on great importance, which provides a tailwind for the company’s bread-and-butter privileged accounts platform, and supports its 30% revenue growth levels,” the analyst wrote.

Estimates May Prove Conservative

CyberArk is a high growth company, is profitable and has the ability to generate cash. Nandury believes that the company would be able to beat the current expectations, driven by high spending levels and increased sales capacity.

CyberArk is also a potential acquisition candidate, which limits downside from current levels.