We expect CyberArk Software Ltd. CYBR to beat estimates when it reports third-quarter 2015 results on Nov 5. The company has been performing extremely well since it got publicly listed on the Nasdaq Stock Exchange a year ago.
CyberArk has gained momentum over the past year and surpassed estimates in all the four trailing quarters with an average beat of 987.50%. Last quarter, the global IT security software solution provider posted a positive earnings surprise of 275.00%.
Let us see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that CyberArk is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate (earnings of 11 cents) and the Zacks Consensus Estimate (earnings of 10 cents), stands at +10.00%. This is very meaningful and indicates a likely positive surprise for shares.
Zacks Rank: CyberArk has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 and 3 (Hold) have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of CyberArk’s Zacks Rank #2 and +10.00% ESP makes us confident in looking for a positive surprise.
What is Driving the Better-than-Expected Results?
We are encouraged by CyberArk’s sustained focus on offering industry-leading solutions and go-to-market business model which have helped it to drive growth. Furthermore, we expect that the increasing spending on IT security to benefit CyberArk’s results in the third quarter.
The demand for cyber security is on the rise and CyberArk’s previous quarterly results show that it is capitalizing on the opportunity. Notably, the company has witnessed a higher number of large deal signings in the past quarters which we expect to positively impact results in the to-be-reported quarter.
With the advancement in technology, more organizations are adopting a bring-your-own-device policy, which has enhanced employee productivity with anytime, anywhere access, while making it all the more necessary for the organizations to enforce data security measures.
Moreover, per Gartner IT, worldwide spending on IT security in 2014 was about $70 billion and is likely to reach $76.9 billion in 2015. All these factors are likely to aid CyberArk’s third-quarter results.
Other Stocks to Consider
Here are some other companies which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Facebook Inc. FB, with an Earnings ESP of +5.71% and a Zacks Rank #1.
CDW Corp. CDW, with an Earnings ESP of +2.63% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment