Oppenheimer’s Favorite Stocks For Next 12 Months: Top 32 Stock Picks

19. CyberArk Software Ltd. (NASDAQ:CYBR)

Share Price Upside: 10%

Number of Hedge Fund Investors In Q2 2024: 55

Average Analyst Share Price Target: $308.39

CyberArk Software Ltd. (NASDAQ:CYBR) is a cybersecurity company that enables firms to manage their employee identities. Being a software as a service (SaaS) provider, CyberArk Software Ltd. (NASDAQ:CYBR) benefits from stable recurring revenue which is contingent on its ability to grow its customer base. CyberArk Software Ltd. (NASDAQ:CYBR) is also benefiting from the rise in cloud adoption in the industry as well as increasing requirements by the SEC which require firms to promptly disclose any cybersecurity events. Additionally, the broader corporate sector is also seeing a rise in the adoption of multi factor authentication identity management solutions due to rising cyber attacks. This introduces additional tailwinds for CyberArk Software Ltd. (NASDAQ:CYBR), and the firm has managed to hedge the broader drop in enterprise spending by posting 36% and 34% ARR growth during its Q4 2023 and Q1 2024, respectively. Oppenheimer believes that the firm “has established itself as a leader in the privileged account management sector and has expanded into new growth areas.”

Another growing identity management area is machine identity management, as AI creates new opportunities and threats for the industry. Here’s what CyberArk Software Ltd. (NASDAQ:CYBR)’s management had to say during the Q1 2024 earnings call:

“The world of securing machine identities is changing rapidly. Organizations are grappling with a larger variety and an ever-growing number of machines from applications to bots to workloads to IoT devices. Each one of these machines needs to be secured and managed across the life cycle of multiple identity components from secrets to digital keys to certificates. The proliferation of AI is further accelerating the growth and complexity of machine identities. This is becoming a top security challenge.

Traditionally, managing machines often sits outside the security teams remit of control. However, this practice exponentially increases risk and is unsustainable in today’s threat landscape. Customers increasingly realize they need to scale their machine identity security programs beyond local vaults, loosely enforced policies and opensource tools. They need an enterprise-ready machine identity security approach that can scale and is tied into their human identity security program through a single platform. One great win that exhibited all I am describing was with a CyberArk customer who has been with us since 2018. We expanded our long-standing relationship with the Department for Work and Pensions in the U.K. with an expanded program while kicking off a robust secrets management program.”