Artificial intelligence stock CyberArk Software is just above a buy zone from a buy point of 375.75. Shares are trying to get past the 400 level after breaking out of a third-stage cup-with-handle base, according to IBD MarketSurge. CyberArk stock is Tuesday's selection for IBD 50 Stocks To Watch.
Shares fell after first-quarter results on May 13 and carved the handle. Earnings per share of 98 cents increased 31% from the prior year and sales grew 43% to $317.6 million. Both beat estimates of 79 cents per share on sales of $305 million.
Cybersecurity Stock Outperforms S&P 500
The cybersecurity stock holds a Composite Rating of 96 and Relative Strength Rating of 93. However, the Earning Per Share Rating of 46 is weak after earnings declined 1% in the fourth quarter, following triple-digit earnings growth in the two prior quarters.
Another weak feature is the relative strength line which has been flat since February. That shows that the stock has not been outperforming the benchmark S&P 500 index. As of Monday's closing price, the stock had gained 20% year to date vs. the S&P 500's 2% gain.
For the second quarter, the company anticipates $315 million in sales at the midpoint and earnings of 78 cents per share. For the full year, sales guidance stood at $1.32 billion with earnings of $3.80 per share. Both are midpoints of a range.
Analysts have revised their profit estimates higher for the full year. In 2025, they expect earnings growth of 26% with per-share earnings of $3.80, meeting the company's midpoint full-year outlook. Earnings estimates for 2026 also suggest 26% growth and per-share earnings of $4.79.
CyberArk provides a platform for identity and access management inside businesses and to identify insider threats in cloud and hybrid setups and from servers to endpoints.
Its platform also allows businesses to secure AI agents that can operate without the conventional oversight from IT teams. As business processes move beyond automation of repetitive tasks to autonomous AI agents, they need to safeguard against AI identity threats and other insider threats through software such as CyberArk's.
CyberArk Stock: Strong Institutional Support
Mutual funds have been adding the stock to their holdings. The Accumulation/Distribution Rating of B shows strong institutional support in the last 50 trading days. Funds own 59% of outstanding shares. More funds have been adding the stock over the past seven quarters. Several funds in the Investor's Business Daily mutual fund index hold the stock, such as the Fidelity Contrafund (FCNTX), the Invesco Discovery Fund (OPOCX), and the T. Rowe Price New Horizons Fund (PRNHX).
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