DA Davidson Optimistic on CyberArk Software After Strong Quarter
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Source: Benzinga
- Subscription Growth Drives Results: CyberArk Software reported revenue of $372.7 million and adjusted EPS of $1.33 in its latest quarterly report, slightly below expectations, yet supported by a robust 28% growth in subscription revenue, which constituted 83% of total revenue.
- Strong ARR Momentum: The analyst highlighted that CyberArk's annual recurring revenue (ARR) rose 23% year-over-year to $1.44 billion, with subscription ARR growing approximately 29% organically, indicating strong market demand and customer retention.
- Operating Margins Slightly Below Expectations: Although operating margins came in slightly lower than anticipated due to rising costs, the free cash flow exceeded forecasts, reflecting the company's solid financial management and bolstering investor confidence.
- Acquisition Outlook Affects Guidance: With the pending acquisition by Palo Alto Networks, CyberArk will not hold an earnings call or provide updated guidance; however, the analyst maintains a bullish outlook, projecting next quarter's revenue at $378.6 million and EPS at $1.35.
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Analyst Views on PANW
Wall Street analysts forecast PANW stock price to fall
34 Analyst Rating
28 Buy
5 Hold
1 Sell
Strong Buy
Current: 357.530
Low
157.00
Averages
232.49
High
265.00
Current: 357.530
Low
157.00
Averages
232.49
High
265.00
About PANW
Palo Alto Networks, Inc. is a global artificial intelligence (AI) cybersecurity company, with a comprehensive portfolio of cybersecurity solutions and platforms across network, cloud, security operations, AI and Identity. Its network security platform includes Secure Access Service Edge (SASE), Next-Generation Firewalls, Cloud Delivered Security Services (CDSS), Prisma AIRS, and Strata Cloud Manager (SCM). It delivers security operations capabilities that unifies standalone Security Information and Event Management (SIEM) tools, endpoint security, security automation, cloud detection and response (CDR), as well as attack surface management (ASM) capabilities on its Cortex platform. It delivers comprehensive security across the cloud application development lifecycle through Cortex Cloud. Its Unit 42 brings together expertise across threat research, incident response, and security consulting to deliver intelligence-driven, response-ready outcomes that help customers reduce cyber risk.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Technology-Driven Growth: CrowdStrike CEO George Kurtz noted that the role of cybersecurity has shifted from risk management to being a strategic accelerator for AI adoption, indicating that the demand for security solutions will continue to grow as enterprises implement AI, driving long-term growth in the cybersecurity sector.
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- Market Demand Outlook: Major hyperscalers like Amazon, Alphabet, Microsoft, and Meta are projected to invest $750 billion in AI infrastructure by 2025, highlighting that cybersecurity companies will play a critical role in the future AI ecosystem, ensuring data security and preventing cyberattacks.
See More
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- Memory Chip Price Surge: The ongoing artificial demand has driven memory chip prices up, resulting in stock price increases of 220% for Micron and 570% for Sandisk this year, but investors are worried that such growth may not be sustainable, potentially affecting future profitability.
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- ARR Forecast Enhancement: Analysts project NGS annual recurring revenue (ARR) to reach $10.95 billion in FY27, based on approximately $1.5 billion in net-new ARR during FY26, showcasing the company's robust growth potential in the cybersecurity sector.
- Acquisition Contribution Analysis: Expected contributions include approximately $250 million in net-new ARR from CyberArk and a normalized net-new ARR contribution of $100 million from Chronosphere, indicating that the acquisition strategy is effectively strengthening the company's revenue base.
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See More
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- Optimistic Market Outlook: CrowdStrike anticipates its addressable market will grow to $325 billion in the long term, and management's forecast suggests ARR could reach $20 billion by FY2036, highlighting substantial long-term growth potential in the cybersecurity sector.
- Valuation Pressure: Although the stock split makes CrowdStrike shares more appealing, its current price-to-sales ratio of 38.7 is significantly higher than its competitors, suggesting that investors may face disappointment in the short term, necessitating a long-term investment strategy for potential positive returns.
See More
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- Annual Recurring Revenue Surge: In Q1 of fiscal 2027, CrowdStrike's AI Detection and Response (AIDR) module saw a staggering 250% increase in annual recurring revenue (ARR) from the previous quarter, driving total ARR to $5.5 billion, a 24% year-over-year growth, indicating strong demand for its flexible subscription model.
- Market Outlook: CrowdStrike anticipates its addressable market will grow to $325 billion in the long term, coupled with management's forecast of ARR reaching $20 billion by fiscal 2036, highlighting the company's long-term growth potential in the cybersecurity sector.
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See More
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- Analyst Upgrades: Scotiabank issued positive evaluations for several identity and exposure management vendors, and although Varonis was not specifically mentioned, the overall optimistic sentiment boosted related stocks, suggesting increased corporate spending on cybersecurity.
- Market Volatility: Varonis has experienced 24 moves greater than 5% over the past year, and today's increase indicates that the market considers this news significant, though it does not fundamentally alter perceptions of the company's business.
- Long-Term Performance: Despite a 41.9% rise since the beginning of the year, Varonis shares are currently trading at $45.47, which is 28.2% below the 52-week high of $63.31, reflecting a long-term loss for investors who bought $1,000 worth of shares five years ago, now valued at only $751.43.
See More
