By Sam Boughedda
CyberArk Software's (NASDAQ:CYBR) price target was raised to $185 from $170, with its Buy rating maintained by BofA analysts on Tuesday.
They said in a memo to clients that CyberArk is a technology leader in an underappreciated market, while it has an attractive valuation compared to peers.
"We are increasing our PO for CyberArk from $170 to $185 and our target multiple from 8.9x CY23E EV/Sales to 9.7x. Our target valuation increase is related to positive channel checks, favorable market positioning and tailwinds for growth in the PAM market, which we believe is an underappreciated market," wrote the analysts.
They explained that BofA's updated valuation also brings CyberArk more in line with next-gen cybersecurity peers such as CrowdStrike (NASDAQ:CRWD) and Zscaler (NASDAQ:ZS).
"CyberArk is currently trading at a discount to cyber peers such as CrowdStrike and Zscaler, which we attribute to 1) the company's transition from perpetual licensing to a subscription model and 2) an underappreciation for the PAM market," they added. "However, we believe that these factors are temporary, as the transition to subscription comes to completion, and as the PAM market continues to experience steady growth driven by multiple tailwinds, and we see upside to the current 7.9x CY23 EV/Sales valuation."