Nomura Securities Upgrades CyberArk Software (CYBR) to Buy

Nomura Securities upgraded CyberArk Software (NASDAQ: CYBR) from Neutral to Buy with a price target of $62.00 (from $57.00).

Analyst Frederick Grieb commented, "While historically we have been positive on CyberArk’s market position and solid product set, we had been unable to get comfortable with the company’s rich valuation. In the past three months, however, CyberArk has traded down 25% (vs. the S&P 500 down 8%) and is now trading at a 7.7x multiple on our calendar 2016 revenue estimate – a level we find attractive, given our expectation for 35% yoy growth in CY’16."

The firm's Bottom-Up Analysis Suggests a $9.0bn License Revenue TAM. "CyberArk’s addressable market, Privileged Account Management (PAM), is a sub segment of the Identity and Access Management market. Gartner estimates the market was $512mn in 2014, growing 32% yoy, but as growth in the nascent submarket accelerates, we find it important to estimate the potential TAM in a more mature state. Taking a bottom-up approach, we arrive at a $9.0bn potential TAM for CyberArk license revenue. We have assumed the top 10,000 companies globally as the target customer base. Additionally, we note that this market should be able to support $1.8bn in annual maintenance revenue, assuming maintenance is priced at about 20% of license revenue."

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 $52.70 yesterday.

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