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A Look at CyberArk’s Valuation

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May. 30 2019, Published 11:54 a.m. ET

Is CyberArk stock overvalued?

CyberArk (CYBR) stock has gained over 80% this year. Could the stock see more upside or is it due for a correction? Whereas CYBR’s forward 2019 PE multiple is 53.8x, analysts expect its EPS to rise just 1.9% in 2019 and 18.6% in 2020. They expect its earnings to grow 19% compounded annually in the next five years. 

These metrics indicate that CYBR stock is grossly overvalued and could fall in case of an earnings or revenue miss. CYBR’s estimated five-year PEG (PE-to-growth) ratio is 3.1x. A PEG ratio below one suggests a stock is undervalued.

CyberArk has little exposure to China and will likely be immune to the trade war scenario. However, the company’s decelerating sales growth coupled and less-than-impressive earnings expansion may not bode well for this stock. Could CyberArk’s growth story be over?

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How Wall Street views CYBR stock

Of the 21 analysts tracking CyberArk, 11 recommend “buy,” ten recommend “hold,” and none recommend “sell.” Their 12-month average target price for CyberArk is $137.63, and their median estimate is $138, to which CyberArk stock is trading at a 3% discount. Peers Palo Alto Networks (PANW), Fortinet (FTNT), and FireEye (FEYE) are trading at 29.0%, 18.5%, and 39.0% discounts to analysts’ average 12-month targets.

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