Analysts Rush to Raise CyberArk Price Targets After Earnings

It was a beat-and-raise for the cybersecurity specialist this quarter

by Karee Venema

Published on Nov 8, 2018 at 9:47 AM

The shares of CyberArk Software Ltd (NASDAQ:CYBR) are up 10.2% this morning to trade at $78.31 -- fresh off a new record high of $84.21 -- after the cybersecurity firm reported adjusted third-quarter earnings of 48 cents per share on $84.7 million in revenue, more than analysts were expecting. CyberArk Software also raised its full-year profit and revenue forecasts.

No fewer than 10 analysts have raised their CYBR stock price targets, with Evercore ISI setting the highest bar at $96 -- a 33% premium to last night's close. By comparison, the average 12-month price target for CyberArk is $89.29, while 11 of 17 analysts maintain a "buy" or better rating, with not a single "sell" on the books.

This optimism is seen elsewhere. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CYBR's top-heavy 10-day call/put volume ratio of 28.00 ranks in the 98th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Ahead of earnings, premium on short-term options was pricing in extremely elevated volatility expectations, per CYBR's 30-day at-the-money implied (ATM) volatility (IV), which closed last night at 56.2% -- in the 94th annual percentile. Meanwhile, the stock's 30-day IV skew settled Wednesday at 76%, registering in the 98th percentile of its 12-month range. In other words, short-term calls had rarely been cheaper than puts heading into today's trading.

Coming off its worst monthly performance since July 2017 -- with CYBR shedding 14.5% in October -- the stock is now headed toward its biggest one-day gain since January 2016. More broadly, CyberArk Software stock was already up 73% year-to-date heading into today, with recent support emerging at its rising 120-day moving average.

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