CyberArk Price Target Raised To $45 By Imperial On Impressive Q1, Risk/Reward Balance

Imperial Capital raised the price target of Cyberark Software Ltd(NASDAQ: CYBR) by 9.7 percent to $45, implying a potential upside of 8 percent above recent levels. The change follows the company's better-than-expected quarterly results.

Cyberark reported first-quarter revenue of $46.9 million and adjusted EPS of $0.23, compared to the Imperial/Street revenue estimates of $43.0 million/$43.4 million and adjusted EPS estimates of $0.16/$0.16. The results were aided by 38 percent growth in license revenue to $27.5 million. Maintenance and professional services revenue rose 50 percent to $19.4 million.

Related Link: JPMorgan Views Cyberark As A Standout In Security Group

Looking Forward

For the second quarter, the company sees revenue of $47.5 million–$48.5 million, and adjusted EPS of $0.18–$0.20. Guidance compares with Imperial/Street previous revenue estimates of $47.2 million/47.5 million and adjusted EPS estimates of $0.17/$0.18.

For FY16, the company expects revenue of $209 million–$211 million, and adjusted EPS of $0.87–$0.91. Guidance compares with Imperial/Street previous revenue estimates of $206 million/207 million and adjusted EPS estimates of $0.85/$0.87.

"We believe CYBR is benefiting from increased awareness of the need to secure privileged accounts, and we think CYBR could continue to capture numerous greenfield opportunities, with potential upside from increased penetration into mid-size customers," analyst Michael Kim wrote in a note.

Rating, Valuations And Justification

However, the analyst maintains his In-Line rating on the stock.

"At recent levels, we think CYBR shares offer balanced risk/reward and we believe investors could become more constructive as the company gains greater scale and broader adoption of its newer offerings (e.g., Application Identity Manager, Privileged Threat Analytics, Viewfinity), and delivers less volatile license revenue growth and margin expansion over the coming quarters," Kim noted.

The analyst raised his FY16 revenue estimate to $210.5 million from $206 million, adjusted EPS estimate to $0.91 from $0.85. The Street expects EPS of $0.92 on revenue of $210.91 million.

At time of writing, shares of Cyberark were up 2.72 percent on the day at $42.61.