CyberArk Extends Breakout After Strong Q3 Earnings

Revenue, earnings, and guidance beat estimates

CyberArk Software Ltd. (CYBR) shares rose more than 10% during Wednesday's pre-market session after the company reported better-than-expected third quarter financial results.

Revenue rose 27.7% to $108.1 million, beating consensus estimates by $5.06 million, while non-GAAP net income came in at 65 cents per share, beating consensus estimates by 18 cents per share. Management's full-year guidance came in at $429.2 million to $431.2 million, which was higher than the $422.23 million consensus, while earnings per share (EPS) guidance of $2.58 to $2.61 was also higher than the $2.29 consensus.

The bullish financial results come a month and a half after Cowen & Co. initiated coverage of CyberArk stock with an Outperform rating and a price target of $145 per share. Analyst Nick Yako believes that the company is a leader in one of the fastest-growing segments of security that still has a long runway for customer growth. Prior to the analyst initiation, the stock had beaten its second quarter top- and bottom-line estimates and raised its full-year revenue and EPS targets.

Chart showing the share price performance of CyberArk Software Ltd. (CYBR)

From a technical standpoint, CyberArk stock broke out from trendline resistance to test the 200-day moving average at $115.62 during Wednesday's session. The relative strength index (RSI) moved toward overbought levels, but the moving average convergence divergence (MACD) accelerated its bullish uptrend. These indicators suggest that the stock could have more room to run before consolidating a bit during its secular rise.

Traders should watch for some consolidation near the 200-day moving average at $115.62 over the coming sessions. If the stock moves higher, traders could see a move to retest prior highs of around $150 over the intermediate term. If the stock breaks down lower, traders could see a move toward trendline support near $105, but that scenario appears less likely given the stock's recent fundamental and technical strength.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

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