CyberArk Software (CYBR): Assessing Valuation After Optiv’s Major Workforce Identity Security Deployment

CyberArk Software (CYBR) just landed a major customer win, announcing that Optiv completed a sweeping rollout of CyberArk’s Workforce Identity Security solution in under a month. Optiv’s smooth transition from its legacy SSO platform, migrating more than 2,500 employees without disruption, says a lot about the reliability and effectiveness of CyberArk’s technology. This isn’t just another logo; Optiv has been a long-term partner. Expanding the relationship with such a seamless deployment gives investors a clear reason to pay attention. It’s the kind of high-profile deal that can shape perception fast. Over the past year, CyberArk’s stock has delivered an impressive 80% gain, riding a wave of growing cybersecurity demand and several similar contract expansions. Momentum has definitely built up, with shares climbing nearly 40% year-to-date and extending those gains through the past month. New business wins seem to keep lining up, which often reinforces bullish sentiment and raises expectations for future growth. But that leads to the real question for investors right now: is CyberArk Software slipping into bargain territory after its run, or has the market already priced in this kind of strong future performance?

Most Popular Narrative: Fairly Valued

CyberArk Software is viewed as fairly valued according to the most popular analyst narrative, with the current share price closely aligned to consensus estimates for fair value based on financial projections and future growth expectations.

The integration of Venafi and Zilla Security into CyberArk is expected to enhance its competitive position in identity security. This integration is anticipated to provide opportunities for revenue growth through cross-selling within its existing customer base and expanding its total addressable market. The acquisition of Zilla Security aims to address 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.

Want to know what powers this lofty valuation? The blueprint behind the analysts’ target is a bold leap in future profit margins and a bet on revenue expansion that goes well beyond the industry norm. One element is a projected turnaround that hinges on sustained earnings growth, but the assumptions behind these forecasts may surprise you. If you're curious about the financial engine fueling this fair value call, the real numbers are the real story.

Result: Fair Value of $462.53 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, integration risks with recent acquisitions and growing market competition could quickly shift CyberArk’s outlook if these factors are not managed effectively.

Find out about the key risks to this CyberArk Software narrative.

Another View: Discounted Cash Flow Perspective

A different angle comes from our DCF model, which looks at future cash flows instead of what analysts expect or multiples. This method actually sees CyberArk as overvalued. Does the real answer lie somewhere in between?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CyberArk Software for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CyberArk Software Narrative

If you want to dig into the data yourself or question these conclusions, you can craft your own view of CyberArk in just a few minutes. Do it your way.

A great starting point for your CyberArk Software research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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