Tepid first-quarter earnings took a toll, but the analysts said this:
We believe the company’s multiple should be a premium versus hardware-exposed vendors and a slight discount to SaaS peers given CyberArk’s perpetual sales model can be lumpy. This risk is mostly offset by the healthier state of the privileged account management market and reacceleration of growth for CyberArk. Management has highlighted that many temporary issues are now behind the company, and the market is expected to remain high-growth.
The BofA Securities price objective is $130, and the posted consensus target is $114.50. CyberArk Software stock closed at $101.10 on Tuesday.
Shares of this cyber and data security company were shellacked since the initial public offering last year but have rallied back. Ping Identity Holding Corp. (NYSE: PING) is a leader in identity access and management. Its products safeguard enterprise applications and data by providing controls around user authentication, access and more.
Ping’s single-sign-on technology helps streamline user workflow by providing a single password for multiple applications to reduce log-ins. Additional product features include consumer identity management, Internet of Things (IoT) and application programming interface (API) management. Ping differentiates with a history of complex deployments across hybrid networks.
The Ping Intelligent Identity platform provides customers, employees, partners and, increasingly, IoT with access to cloud, mobile, software as a service (SaaS) and on-premises applications and APIs, while also managing identity and profile data at scale. Over half of the Fortune 100 choose to use the company for the identity expertise, open standards leadership and partnership with companies including Microsoft and Amazon.
The analysts are very bullish on identity stocks and noted this:
For Ping, we raise our PO which is now based on roughly 8x enterprise value to sales vs 7x prior, as we believe its cloud transition, sticky large enterprise customer base, and expansion with products may help close the valuation gap versus peer Okta trading at 25x.
The $27 BofA Securities price target was recently lifted to $32. The consensus target is $28.08, and Ping Identity stock closed at $30.63, after rising well over 6% on Tuesday.
This remains one of the hottest stocks and is a top pick at BofA Securities. Zscaler Inc. (NASDAQ: ZS) is a leader in the cloud-based secure web gateway market (SWG). These gateways help protect enterprise internet traffic, and there is a material market shift from legacy appliance-based approaches to cloud services.
Zscaler’s products are uniquely architected to address the higher-growth cloud or SaaS portion of the market, and Zscaler’s platform is designed to apply additional security features outside of SWG to all enterprise traffic over time.
The analysts love the company and said this:
Zscaler was a top pick entering the year, a top COVID pick, and remains a top pick as its set to ride multi-year trends toward cloud-delivered network security. The market now better understands Zscaler’s approach, and the COVID disruptions highlight the need for an architecture that is agnostic to user and application locations.
BofA Securities recently raised its price objective to $110 from $100. The consensus figure is much lower at $90.33. Tuesday’s last trade for Zscaler stock hit the tape at $102.81.
While the whirlwind around the top stocks in the sector has slowed dramatically from the pace of five and six years ago, the need is increasing every year. These top companies offer investors solid ways to play the sector in a multitude of areas. Most importantly, the stocks are trading at levels that still offer solid entry points, although partial position buys may not be a bad idea now.
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