A short squeeze could push CYBR shares past a key technical level
CyberArk Software Ltd (NASDAQ:CYBR) is trading up 3.6% at $57.05, thanks to better-than-expected first-quarter earnings and revenue. The stock has since received at least six price-target hikes, the highest of which was to $64 from $55 at Stifel. This is just more of the same from CYBR shares, which were up 33% year-to-date even before today, and will now have rallied the day after earnings in three straight quarters. And if this price action can shake free some short sellers, or entice more analysts, there's reason to believe the equity could enjoy another leg higher.
Short interest on CyberArk fell sharply at the beginning of the year, coinciding with a sharp upward push from the stock. But short sellers started piling on in the weeks before earnings, with short interest increasing 27.2% in the most recent reporting period alone. There are 1.1 million shares currently sold short -- four times the average daily volume. If these bears begin to ditch their losing bets following today's news, it could provide even more tailwinds for CYBR, like the last round of short-covering did.
An extended rally from the security would be huge, as bulls would love to see a meaningful move away from the $56 and $57 levels. This area, roughly equivalent to a $2 billion market cap, has capped CYBR's upside in recent years, suggesting it could switch roles and act as support going forward.
The equity is also quickly approaching its average 12-month price target of $61.42, and eight of the 17 brokerage firms in coverage have only "hold" ratings on the stock. In other words, today's round of bullish analyst attention could be just the first of many.