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CyberArk: Unique Niche in Hot Sector
10/15/2015 8:00 am EST
Cyber-security is arguably the hottest sector in investing. In the US alone, cyber crime already costs an estimated $100 billion each year and will grow to $170 billion by 2020, suggests Nicholas Vardy, editor of The Alpha Investor Letter.
This reflects both the growing sophistication of cyber-attacks and the rise of the Internet of Everything, with a growing number of physical objects connected to the Internet and more sensitive personal data being stored on cloud servers.
Israel-based cyber-security heavyweight CyberArk Software (CYBR) is a leading player in the cyber-security software market.
CyberArk boasts a unique market niche. It focuses on the protection of privileged account information for top executives and key personnel who have access to critical corporate or agency data.
This is a top growth story. With 1,900 enterprise customers worldwide, analysts estimate that the company has penetrated only 3% of its potential customers.
Its quarterly revenue has grown at a double-digit percentage rate for more than three years. Last quarter, it rose 70% and earnings shot up 138%.
The company also just announced its largest acquisition, the $30.5 million purchase of Viewfinity, a maker of software designed to secure a network from its endpoints.
Finally, from a technical standpoint, CyberArk is set for a rebound. If it can stay above the $50 level—its current level of resistance—then the stock should be off to the races for a strong Q4 rally.
With an average target price of $67, that would mean about a 30% upside in the stock from current levels. So buy CyberArk Software and place your stop at $44.50.
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