CYBR: Pending Acquisition Will Shape Future Amid Mixed Industry Sentiment

Analysts have raised their price target for CyberArk Software to $485.47, an increase of nearly $12. This reflects broad optimism about the company's future value following the pending acquisition by Palo Alto Networks and ongoing positive industry feedback.

Analyst Commentary

Recent research and commentary from market analysts reflect a blend of optimism and caution surrounding CyberArk Software, particularly in the context of its pending acquisition by Palo Alto Networks and broader sector trends.

Bullish Takeaways

Bullish analysts highlight the strong strategic rationale of the CyberArk acquisition, citing long-term industry benefits and positive early feedback regarding integration with Palo Alto Networks.
Several price target increases for both CyberArk and Palo Alto Networks suggest heightened expectations for future valuation, supported by anticipated growth in the cybersecurity and AI security markets.
Positive momentum in customer and partner feedback is bolstering confidence that CyberArk’s platform is well positioned to drive continued growth and capture market share.
Forecasts of robust recurring revenue and expanding free cash flow margins indicate confidence in execution and a potential for above-market financial performance after the acquisition.

Bearish Takeaways

Bearish analysts have downgraded CyberArk’s rating to Hold or Market Perform amid uncertainty regarding near-term upside, citing the pending acquisition as limiting further appreciation potential.
Some caution remains about the sustainability of valuation following the buyout, with questions about whether alternative offers will materialize or if the deal terms fully capture CyberArk’s growth prospects.
Outflows from CyberArk shares, along with concern over increasingly aggressive valuations in peer companies, highlight uncertainty about the broader sector’s stability as investors adjust to deal-related dynamics.
Mixed feedback from industry checks and conservative tones in some recent commentary reflect ongoing vigilance about maintaining execution and integrating operations smoothly within Palo Alto Networks.

What's in the News

Canaccord downgraded CyberArk to Hold from Buy due to the pending Palo Alto Networks acquisition, but raised its price target to $502 (Canaccord).
CyberArk announced general availability of its Secure AI Agents Solution, providing industry-first privilege controls to secure AI agent identities across SaaS, cloud, and developer environments.
CyberArk expanded its Machine Identity Security portfolio with new discovery and context capabilities. This enables security teams to automatically identify and secure machine identities and improve risk management.
A Special Shareholders Meeting is set for November 13, 2025, to consider the proposed merger and related transactions.
Optiv successfully deployed CyberArk Workforce Identity Security. The company seamlessly transitioned over 2,500 employees to a new platform within 30 days and enhanced secure access to business-critical applications.

Valuation Changes

Consensus Analyst Price Target has risen slightly from $473.55 to $485.47. This reflects increased confidence in future value.
Discount Rate has edged down marginally from 10.84% to 10.80%. This indicates a modest decrease in perceived risk.
Revenue Growth projections have fallen from 19.88% to 18.52%. This suggests a more conservative outlook for near-term growth.
Net Profit Margin estimates have decreased slightly from 4.33% to 4.22%.
Future P/E ratio has increased marginally from 439.56x to 440.40x. This places a slightly higher premium on anticipated earnings.

Strategic acquisitions and R&D in AI and machine identities bolster CyberArk's identity security offerings, enhancing revenue through cross-selling and market expansion.
Focus on unified identity security platform and machine identity market positions CyberArk for significant growth and improved margins as customers consolidate identity solutions.
Integration risks with acquisitions, increasing market competition, and evolving cybersecurity threats could impact CyberArk's financial performance and operational complexity.

Catalysts

About CyberArk Software

Develops, markets, and sells software-based identity security solutions and services in the United States, Europe, the Middle East, Africa, and internationally.What are the underlying business or industry changes driving this perspective?

The integration of Venafi and Zilla Security into CyberArk is expected to enhance its competitive position in identity security, allowing for revenue growth through cross-selling opportunities within its existing customer base and expanding its total addressable market.
The acquisition of Zilla Security is aimed at addressing longstanding inefficiencies in identity governance administration (IGA), which is expected to reduce operational complexity and improve CyberArk's net margins by offering faster deployment and integration than traditional IGA solutions.
The evolving machine identity market, coupled with CyberArk’s focus on AI-driven identity security through its machine identity capabilities and Secrets Management, is expected to drive significant revenue growth as organizations seek integrated solutions to manage increasingly complex identity security needs.
CyberArk's unified identity security platform, which includes privileged access management and workforce security, is expected to drive higher average deal sizes, revenue growth, and improved net margins as customers increasingly consolidate their identity security solutions with trusted vendors.
Ongoing investment in research and development, especially in areas like AI and machine identities, is set to provide CyberArk with innovative solutions to capture new market opportunities, boosting future earnings through product differentiation and improved customer trust.

CyberArk Software Earnings and Revenue Growth

CyberArk Software Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming CyberArk Software's revenue will grow by 19.9% annually over the next 3 years.
Analysts assume that profit margins will increase from -13.8% today to 4.7% in 3 years time.
Analysts expect earnings to reach $96.6 million (and earnings per share of $2.13) by about September 2028, up from $-165.4 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $128.2 million in earnings, and the most bearish expecting $-83.6 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 397.9x on those 2028 earnings, up from -138.9x today. This future PE is greater than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 10.87%, as per the Simply Wall St company report.

CyberArk Software Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The integration of Venafi and Zilla Security into CyberArk's operations presents execution risks which could impact the company's ability to achieve projected synergies and financial outcomes, potentially affecting revenue and net margins.
Increasing competition in the identity security market and pressure to expand its platform rapidly could lead to increased operational complexity, adversely impacting earnings if not managed properly.
The cybersecurity landscape is highly dynamic, with evolving threats and the need for quick adaptation. Delays or missteps in product development or market response due to these complexities could negatively affect customer adoption and revenues.
The dependency on SaaS applications and cloud environments involves significant risk related to security and regulatory changes, which could impact operational costs and net margins if not effectively addressed.
The company faces potential macroeconomic uncertainties, such as fluctuating currency rates which impacted ARR by $2 million as mentioned, affecting overall earnings and financial stability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $462.534 for CyberArk Software based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $551.0, and the most bearish reporting a price target of just $415.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.1 billion, earnings will come to $96.6 million, and it would be trading on a PE ratio of 397.9x, assuming you use a discount rate of 10.9%.
Given the current share price of $455.55, the analyst price target of $462.53 is 1.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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