CyberArk Stock Soars After Analysts Flag Benefit From Rival’s Vulnerability In US Treasury Breach: Retail Smells Huge Opportunity
By Stocktwits Inc | First Published Jan 2, 2025, 9:56 PM ISTMorgan Stanley’s Hamza Fodderwala estimates a one to two-point tailwind to CyberArk’s annual recurring revenue (ARR) growth over the next few years from BeyondTrust’s travails.
Israel-based CyberArk Software, Inc.’s ($CYBR) shares are rallying after some analysts named the company a beneficiary of the recent Treasury hack.
The U.S. Treasury Department disclosed a material state-sponsored breach from access gained via BeyondTrust, a major CyberArk competitor. Morgan Stanley analyst Hamza Fodderwala said CyberArk should benefit from the incident, given that BeyondTrust has a 20% share in privileged access management (PAM).
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The analyst said security will now be on the federal government's mind.
Fodderwala estimates a one to two-point tailwind to CyberArk’s annual recurring revenue (ARR) growth over the next few years, further solidifying its dominance in the PAM market.
The analyst noted that BeyondTrust's CEO said in July that the company had surpassed $400 million in ARR. According to the analyst’s estimate, more than $300 million of this could be from the PAM offering, implying $40 million to $50 million in net new ARR annually.
Morgan Stanley forecasts that the replacement opportunity with the U.S. Treasury could be mid-high single-digit millions in ARR, based on estimates and the department's workforce of over 100,000 employees. “Further, this likely positions CyberArk as the preferred PAM provider for the U.S. government,” it added.
Fodderwala also underlined the escalation of state-sponsored attacks in recent weeks, with several U.S. telecommunication companies targeted as part of the Salt Typhoon breach connected to China.
“While recent concerns around DOGE/Fed spending cuts could have a marginal impact, events like these should keep security spend top of mind for U.S. Federal agencies under the incoming administration,” he said.
The view was echoed by another sell-side firm. The Fly reported that Rosenblatt said the BeyondTrust breach represented a potential opportunity for CyberArk to replace the former’s solutions within the Treasury, other federal agencies, and customers.
Wells Fargo raised its price target for CyberArk shares from $350 to $410 and maintained an ‘Overweight’ rating. The firm also added the stock to its first-quarter ‘Tactical Idea List.’
The firm said the company is well-positioned to outperform expectations in the first quarter and for the remainder of the year.
On Stocktwits, retail sentiment toward CyberArk remains ‘extremely bullish’ (80/100), with message volume tapering but remaining at a ‘high’ level.
A platform user who watches CyberArk shares noted a positive technical formation on the charts.
Another said they saw a massive potential for the company as bad actors abound.
CyberArk shares gained 52% in 2024. At last check, the stock was up 1.80% at $339;.14.
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