Cyberark Software Ltd (NASDAQ:CYBR) has endured a tumultuous period owing to the COVID-19 pandemic. As a market leader in privileged access management market, the company has seen its core business come under pressure. The pandemic triggering mass layoffs has affected the company’s revenue stream as it is a provider of tools that allow companies and businesses to repel internal threats.
COVID-19 Shocks
The shutdown of businesses, as well as the working from home program, has seen the postponement of deals that the company had signed earlier in the year. Its revenue base has taken a significant hit, having increased by just 9% year over year in the first half of the year, the slowest growth rate in the recent past.
The cybersecurity company expects its full-year revenue to increase by just 3% as the COVID-19 pandemic continues to take a toll on business operations. Analysts, on the other hand, expect full-year revenue to rise 7%, with earnings expected to contract by 34%.
While the near-term outlook looks bleak, CyberArk is expected to bounce back once the pandemic is brought under control. Pfizer confirming that its experimental coronavirus vaccine has proved to be effective 90% of the time is good news for the cybersecurity company.
CyberArk Outlook
With businesses expected to come back online with the easing of the pandemic, CyberArk should be able to attract big deals once more. Amid the COVID-19 shocks, the company has also strengthened its product line with newer products. Privilege Cloud and Alero are the latest products that the company is hoping to use to target remote workers awaiting the reopening of the economy in view of the coronavirus vaccine.
Ahead of the release of the third-quarter financial results, CyberArk appears to be trading at a great discount, its sentiments having taken a significant hit in the aftermath of the COVID-19 pandemic. The stock is cheap, given that it is trading at less than 50-times its forward earnings and eight times its full-year sales. With the stock down by close to 15% for the year, it could be a potential breakout play as coronavirus is brought under control.