UPDATE: William Blair Sees Attractive Entry in CyberArk Software (CYBR), Upgrades to Outperform

(Updated - February 10, 2015 7:55 AM EST)

William Blair upgraded CyberArk Software (NASDAQ: CYBR) from Market Perform to Outperform. The change comes ahead of the company's earning report on Thursday. Analyst Jonathan Ho pointed to a favorable cybersecurity spending environment. He also noted a recent pullback in shares, which creates an attractive entry.

"We believe CyberArk will continue to benefit from spending increases in the cybersecurity arena, which should lead the company to deliver results ahead of our and consensus expectations. We are upgrading the stock based on our belief that the valuation has pulled back to more reasonable levels (approximately in line with its revenue multiple at the time we initiated coverage on the stock) along with continued expectations for strong demand in a favorable cybersecurity spending environment," said Ho.

"We also continue to believe the company will likely benefit from acceleration in demand for its solutions, which should drive positive estimates revisions. In our opinion, the recent pullback in valuation since November has created an attractive entry point. We calculate the stock’s enterprise-to-revenue multiple to be 9.5 times our 2015 top-line forecast and less than 8 times our 2016 top-line forecast, versus about 12.5 times at the time of our downgrade (relative to our 2015 forecast)," added the analyst.

William Blair sees Q4 EPS of $0.04 on revenue of $27.0 million.

For an analyst ratings summary and ratings history on CyberArk Software click here. For more ratings news on CyberArk Software click here.

Shares of CyberArk Software closed at $36.09 yesterday.

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