CYBR Stock Trades at a P/S of 12.81X: Should You Buy, Sell or Hold?
CyberArk Forward 12 Months (P/S) Valuation Chart
Traction in Identity Security Drives CyberArk
CyberArk has been leading the identity security space, where it witnessed a CAGR of 44% from 2020 to 2024 and reached an annual recurring revenues (ARR) of $1.17 billion in fiscal 2024 alone. CYBR crossed the milestone of 10,000 customers recently and projects huge growth opportunities given the total addressable market scope for its identity security solutions to be $80 billion. In the first quarter of 2025, CyberArk's subscription ARR grew 65% year over year and is expected to rise on the back of robust demand.
CyberArk is keeping pace with the growing cybersecurity market by capitalizing on the recent trends. CYBR's implementation of AI solutions, including CyberArk Secure AI Agents Solution and CORA AI, has deepened its capability. CyberArk also collaborated with Accenture ACN to enhance its identity security platform with Accenture's AI Refinery.
CYBR's implementation of CORA AI and Secure AI Agents into CyberArk's identity security platform will aid its customers to secure a full spectrum of identities, including human, AI and machine. CYBR will also be exposed to Accenture's client base after Accenture's AI Refinery integration, potentially unlocking large-scale deployments. As CyberArk continues to enhance its offerings with upgrades and AI implementation, the rise in adoption of its identity security products will rise.
Furthermore, CYBR is also expanding its capabilities through inorganic growth. CYBR's acquisitions of Zilla Security and Venafi have expanded its expertise in identity governance and machine identity. The acquisitions also enhanced its recurring revenues and market share. These factors have boosted CyberArk's top line, which is reflected in its recent guidance. For 2025, CyberArk expects revenues in the band of $1.313-$1.323 billion. The Zacks Consensus Estimates for 2025 revenues is pegged at $1.32 billion, reflecting year-over-year growth of 31.88%.
CyberArk Drives Growth Through Key Alliances
Since its inception in 1999, CyberArk has expanded its customer base to include more than 5,400 global businesses, which comprise over 50% of the Fortune 500 and 35% of the Global 2000 companies. One of the key drivers for customer growth is CyberArk's strategic partnerships with tech giants like Microsoft MSFT, Amazon 's AMZN Amazon Web Services ('AWS') and Alphabet's Google Cloud.
By integrating its solutions with Microsoft's Azure Active Directory, Amazon's AWS cloud infrastructure and Alphabet's Google Cloud, CyberArk deepened its ability to secure cloud environments, offering robust identity management solutions across various IT ecosystems. Microsoft and CyberArk further expanded on Microsoft's External Authentication Methods, allowing CyberArk users to use FIDO2-based MFA.
With all these enhancements in place, CyberArk provides its customers with comprehensive and integrated security solutions, making CYBR an indispensable player in today's identity security solutions landscape. CYBR's high gross margin reflects its success in its premium SaaS business and 18% non-GAAP operating margin reflects operational discipline while CyberArk continues to scale. The Zacks Consensus Estimates for its 2025 bottom line is pegged at $3.83, indicating a year-over-year rise of 26.4%.
Image Source: Zacks Investment Research
CyberArk Stock Outperforms Sector
Year to date, CyberArk shares have outperformed the sector and industry. The stock has gained 13.2%, outperforming the Zacks Computer and Technology sector's growth of 7.4% in the same timeframe.
CyberArk YTD Price Performance Chart
CyberArk: Buy, Sell or Hold the Stock?
CyberArk's innovative cybersecurity portfolio with AI integration makes it well-positioned to benefit from the strong TAM of the identity security space. This bodes well for long-term investors. The company's collaboration with industry leaders and high-margin operational business model justifies its premium valuation at present.
CyberArk currently sports a Zacks Rank #1 (Strong Buy), suggesting investors that it is the right time to buy the stock. You can see the complete list of today's Zacks #1 Rank stocks here.
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