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A Look at CyberArk’s Valuation

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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?

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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