CyberArk Software Ltd. (NASDAQ:CYBR), is not the largest company out there, but it saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements to have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine CyberArk Software’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for CyberArk Software
Is CyberArk Software Still Cheap?
According to my valuation model, the stock is currently overvalued by about 38%, trading at US$132 compared to my intrinsic value of $96.17. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that CyberArk Software’s share is fairly volatile (ie its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will CyberArk Software generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. CyberArk Software’s earnings over the next few years are expected to increase by 98%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in CYBR’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe CYBR should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on CYBR for some time, now may not be the best time to enter the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for CYBR, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
With this in mind, we wouldn’t consider investing in a stock unless we had a thorough understanding of the risks. For example – CyberArk Software has 2 warning signs we think you should be aware of.
If you are no longer interested in CyberArk Software, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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