CyberArk Software (CYBR) Q2 Results: What’s Ahead?

CyberArk Software limited liability company CYBR is scheduled to publish its second-quarter 2016 results on August 9. Last quarter, the company reported positive earnings, which surprised at 36.4%. Let’s see how things go with this announcement.

Factors to consider

CyberArk is an Israeli company specializing in protecting accounts against cyberattacks. The company offers several products that protect passwords, eliminate security vulnerabilities and secure cloud resources.

The company reported better-than-expected results for the first quarter of 2016. Revenues also increased compared to the same quarter last year, mainly due to a high increase in the number of licenses.

According to research firm Markets and Markets, the cybersecurity market is expected to reach $170.21 billion by 2020 from $106.32 billion in 2015, representing an annual growth rate of 9.8%. We believe CyberArk Software is well-positioned to capitalize on emerging opportunities.

Moreover, investment in the product suite and market entry are other positive aspects of the company.

It is worth mentioning that the demand for cybersecurity is growing. As technology advances, more and more organizations are adopting a “bring your own device” policy, which increases employee productivity by having access to it anywhere, anytime. However, it has become even more necessary to enforce more stringent data security measures.

CYBER-ARK SFTWR Price and EPS Surprise

CYBER-ARK SFTWR Price Surprise and EPS | CYBER-ARK SFTWR valuation

Whispers about earnings

Our proven model does not clearly show that CyberArk will beat earnings estimates this quarter. This is because for this to happen, the stock must have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). This is not the case here, as you will see below.

Zacks ESP: The company’s Earnings ESP is -20.00% as the Most Accurate Estimate of 12 cents is lower than the Zacks Consensus Estimate of 15 cents.

Zacks Rank: CyberArk’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be sure that we will surprise with the results.

We caution that stocks with a Zacks Rank #4 or 5 (stocks with a Sell rating) should not be included in earnings announcements, especially when the company is experiencing negative estimate revision momentum.

Stocks to consider

Here are some stocks that our model suggests have the right combination of elements to post better earnings this quarter:

Alamos Gold, Inc. AGI, with an Earnings ESP of +100.0% and a Zacks Rank #2

Sun Life Financial Inc. SLF, with an Earnings ESP of +1.47% and a Zacks Rank #2

Vivint Solar, Inc. VSLR, with an Earnings ESP of +1.79% and a Zacks Rank #3

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