Intrinsic value of CyberArk Software Ltd. - CYBR

Previous Close

$112.31

  Intrinsic Value

$164.72

stock screener

  Rating & Target

buy

+47%

Previous close

$112.31

 
Intrinsic value

$164.72

 
Up/down potential

+47%

 
Rating

buy

We calculate the intrinsic value of CYBR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
  6.23
Revenue, $m
  450
  578
  729
  904
  1,104
  1,329
  1,580
  1,856
  2,158
  2,484
  2,834
  3,208
  3,605
  4,024
  4,466
  4,929
  5,414
  5,920
  6,448
  6,998
  7,570
  8,164
  8,782
  9,424
  10,092
  10,786
  11,507
  12,257
  13,037
  13,849
Variable operating expenses, $m
  301
  387
  487
  604
  737
  888
  1,055
  1,239
  1,440
  1,657
  1,889
  2,138
  2,403
  2,683
  2,977
  3,286
  3,609
  3,946
  4,298
  4,665
  5,046
  5,442
  5,854
  6,283
  6,728
  7,190
  7,671
  8,171
  8,691
  9,232
Fixed operating expenses, $m
  67
  69
  70
  72
  74
  75
  77
  79
  80
  82
  84
  86
  88
  90
  91
  93
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  121
  124
  127
Total operating expenses, $m
  368
  456
  557
  676
  811
  963
  1,132
  1,318
  1,520
  1,739
  1,973
  2,224
  2,491
  2,773
  3,068
  3,379
  3,705
  4,044
  4,398
  4,767
  5,150
  5,549
  5,963
  6,394
  6,842
  7,306
  7,790
  8,292
  8,815
  9,359
Operating income, $m
  81
  122
  171
  228
  293
  366
  448
  539
  638
  744
  861
  984
  1,114
  1,252
  1,397
  1,550
  1,709
  1,876
  2,050
  2,231
  2,419
  2,615
  2,819
  3,031
  3,251
  3,479
  3,717
  3,965
  4,222
  4,490
EBITDA, $m
  90
  133
  185
  244
  313
  390
  476
  571
  675
  787
  908
  1,037
  1,174
  1,318
  1,471
  1,631
  1,798
  1,973
  2,156
  2,346
  2,544
  2,750
  2,964
  3,186
  3,417
  3,657
  3,907
  4,167
  4,437
  4,718
Interest expense (income), $m
  0
  0
  3
  8
  13
  18
  25
  32
  40
  49
  59
  70
  81
  93
  106
  120
  134
  149
  165
  182
  199
  217
  235
  255
  275
  296
  317
  340
  363
  388
  413
Earnings before tax, $m
  81
  119
  163
  215
  275
  342
  416
  499
  588
  685
  791
  903
  1,021
  1,146
  1,277
  1,415
  1,560
  1,711
  1,868
  2,032
  2,203
  2,380
  2,564
  2,756
  2,955
  3,162
  3,377
  3,601
  3,834
  4,077
Tax expense, $m
  22
  32
  44
  58
  74
  92
  112
  135
  159
  185
  214
  244
  276
  309
  345
  382
  421
  462
  504
  549
  595
  643
  692
  744
  798
  854
  912
  972
  1,035
  1,101
Net income, $m
  59
  87
  119
  157
  201
  249
  304
  364
  429
  500
  578
  659
  745
  836
  932
  1,033
  1,139
  1,249
  1,364
  1,483
  1,608
  1,737
  1,872
  2,012
  2,157
  2,308
  2,465
  2,629
  2,799
  2,976

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  512
  657
  829
  1,028
  1,256
  1,512
  1,798
  2,112
  2,455
  2,826
  3,224
  3,649
  4,101
  4,578
  5,080
  5,607
  6,159
  6,735
  7,335
  7,961
  8,612
  9,288
  9,991
  10,722
  11,481
  12,270
  13,091
  13,944
  14,832
  15,756
Adjusted assets (=assets-cash), $m
  512
  657
  829
  1,028
  1,256
  1,512
  1,798
  2,112
  2,455
  2,826
  3,224
  3,649
  4,101
  4,578
  5,080
  5,607
  6,159
  6,735
  7,335
  7,961
  8,612
  9,288
  9,991
  10,722
  11,481
  12,270
  13,091
  13,944
  14,832
  15,756
Revenue / Adjusted assets
  0.879
  0.880
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
  0.879
Average production assets, $m
  76
  97
  122
  152
  185
  223
  265
  312
  362
  417
  476
  539
  606
  676
  750
  828
  909
  995
  1,083
  1,176
  1,272
  1,372
  1,475
  1,583
  1,695
  1,812
  1,933
  2,059
  2,190
  2,327
Working capital, $m
  -116
  -149
  -188
  -233
  -285
  -343
  -408
  -479
  -557
  -641
  -731
  -828
  -930
  -1,038
  -1,152
  -1,272
  -1,397
  -1,527
  -1,664
  -1,805
  -1,953
  -2,106
  -2,266
  -2,432
  -2,604
  -2,783
  -2,969
  -3,162
  -3,364
  -3,573
Total debt, $m
  64
  142
  233
  338
  459
  595
  746
  912
  1,094
  1,291
  1,502
  1,727
  1,967
  2,220
  2,486
  2,765
  3,057
  3,363
  3,681
  4,012
  4,357
  4,716
  5,088
  5,476
  5,878
  6,296
  6,731
  7,183
  7,654
  8,144
Total liabilities, $m
  271
  348
  439
  545
  666
  801
  953
  1,119
  1,301
  1,498
  1,709
  1,934
  2,173
  2,426
  2,693
  2,972
  3,264
  3,569
  3,888
  4,219
  4,564
  4,923
  5,295
  5,683
  6,085
  6,503
  6,938
  7,390
  7,861
  8,350
Total equity, $m
  240
  309
  390
  483
  590
  711
  845
  993
  1,154
  1,328
  1,515
  1,715
  1,927
  2,152
  2,388
  2,635
  2,895
  3,165
  3,448
  3,742
  4,047
  4,365
  4,696
  5,039
  5,396
  5,767
  6,153
  6,554
  6,971
  7,405
Total liabilities and equity, $m
  511
  657
  829
  1,028
  1,256
  1,512
  1,798
  2,112
  2,455
  2,826
  3,224
  3,649
  4,100
  4,578
  5,081
  5,607
  6,159
  6,734
  7,336
  7,961
  8,611
  9,288
  9,991
  10,722
  11,481
  12,270
  13,091
  13,944
  14,832
  15,755
Debt-to-equity ratio
  0.270
  0.460
  0.600
  0.700
  0.780
  0.840
  0.880
  0.920
  0.950
  0.970
  0.990
  1.010
  1.020
  1.030
  1.040
  1.050
  1.060
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.100
  1.100
  1.100
Adjusted equity ratio
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  59
  87
  119
  157
  201
  249
  304
  364
  429
  500
  578
  659
  745
  836
  932
  1,033
  1,139
  1,249
  1,364
  1,483
  1,608
  1,737
  1,872
  2,012
  2,157
  2,308
  2,465
  2,629
  2,799
  2,976
Depreciation, amort., depletion, $m
  9
  11
  14
  16
  20
  23
  28
  32
  37
  42
  47
  53
  59
  66
  74
  81
  89
  98
  106
  115
  125
  134
  145
  155
  166
  178
  190
  202
  215
  228
Funds from operations, $m
  68
  98
  133
  174
  220
  273
  331
  396
  466
  543
  624
  712
  805
  903
  1,006
  1,114
  1,228
  1,346
  1,470
  1,599
  1,733
  1,872
  2,017
  2,167
  2,323
  2,486
  2,655
  2,831
  3,014
  3,204
Change in working capital, $m
  -28
  -33
  -39
  -45
  -52
  -58
  -65
  -71
  -78
  -84
  -90
  -96
  -102
  -108
  -114
  -120
  -125
  -131
  -136
  -142
  -148
  -153
  -159
  -166
  -172
  -179
  -186
  -193
  -201
  -210
Cash from operations, $m
  96
  131
  172
  219
  272
  331
  396
  467
  544
  627
  715
  808
  907
  1,011
  1,120
  1,234
  1,353
  1,477
  1,606
  1,740
  1,880
  2,025
  2,176
  2,333
  2,496
  2,665
  2,841
  3,024
  3,215
  3,414
Maintenance CAPEX, $m
  -6
  -7
  -10
  -12
  -15
  -18
  -22
  -26
  -31
  -36
  -41
  -47
  -53
  -59
  -66
  -74
  -81
  -89
  -98
  -106
  -115
  -125
  -134
  -145
  -155
  -166
  -178
  -190
  -202
  -215
New CAPEX, $m
  -18
  -22
  -25
  -29
  -34
  -38
  -42
  -46
  -51
  -55
  -59
  -63
  -67
  -70
  -74
  -78
  -81
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -112
  -117
  -121
  -126
  -131
  -136
Cash from investing activities, $m
  -24
  -29
  -35
  -41
  -49
  -56
  -64
  -72
  -82
  -91
  -100
  -110
  -120
  -129
  -140
  -152
  -162
  -174
  -187
  -198
  -211
  -225
  -238
  -253
  -267
  -283
  -299
  -316
  -333
  -351
Free cash flow, $m
  72
  102
  137
  177
  223
  275
  332
  395
  463
  537
  615
  699
  787
  881
  979
  1,083
  1,190
  1,303
  1,420
  1,542
  1,669
  1,801
  1,938
  2,080
  2,228
  2,382
  2,542
  2,709
  2,882
  3,063
Issuance/(repayment) of debt, $m
  64
  77
  91
  106
  121
  136
  151
  167
  182
  197
  211
  225
  239
  253
  266
  279
  292
  305
  318
  331
  345
  359
  373
  387
  402
  418
  435
  452
  470
  490
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  64
  77
  91
  106
  121
  136
  151
  167
  182
  197
  211
  225
  239
  253
  266
  279
  292
  305
  318
  331
  345
  359
  373
  387
  402
  418
  435
  452
  470
  490
Total cash flow (excl. dividends), $m
  136
  179
  228
  283
  344
  411
  483
  561
  645
  733
  826
  924
  1,027
  1,134
  1,246
  1,362
  1,483
  1,608
  1,738
  1,873
  2,014
  2,159
  2,310
  2,467
  2,631
  2,800
  2,977
  3,161
  3,353
  3,552
Retained Cash Flow (-), $m
  -57
  -69
  -81
  -94
  -107
  -120
  -134
  -148
  -161
  -174
  -187
  -200
  -212
  -224
  -236
  -248
  -259
  -271
  -282
  -294
  -306
  -318
  -330
  -343
  -357
  -371
  -386
  -401
  -417
  -434
Prev. year cash balance distribution, $m
  284
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  363
  111
  147
  189
  237
  290
  349
  414
  484
  559
  639
  724
  815
  910
  1,010
  1,114
  1,223
  1,337
  1,456
  1,579
  1,708
  1,841
  1,980
  2,124
  2,274
  2,429
  2,591
  2,760
  2,935
  3,118
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  348
  101
  128
  156
  184
  211
  236
  259
  278
  293
  303
  309
  310
  305
  296
  283
  266
  246
  224
  201
  177
  153
  130
  108
  88
  71
  56
  43
  32
  23
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

CyberArk Software Ltd is an Israel-based provider of information technology (IT) security solutions that protects organizations from cyber-attacks. The Company's software solutions are focused on protecting privileged accounts, which have become a critical target in the lifecycle of cyber-attacks. The Company's Privileged Account Security Solution consists of various products, such as Shares Technology Platform, Enterprise Password Vault, SSH Key Manager, Privileged Session Manager, Privileged Threat Analytics, Application Identity Manager, CyberArk-Conjur, Endpoint Privilege Manager and On-Demand Privileges Manager. The Company's products provide protection against external and internal cyber threats and enables detection and neutralization of attacks. The Company's Enterprise Password Vault provides customers with a tool to manage and protect all privileged accounts across an entire organization, including physical, virtual or cloud-based assets.

FINANCIAL RATIOS  of  CyberArk Software Ltd. (CYBR)

Valuation Ratios
P/E Ratio 137.4
Price to Sales 17.7
Price to Book 13
Price to Tangible Book
Price to Cash Flow 68.7
Price to Free Cash Flow 72.6
Growth Rates
Sales Growth Rate 34.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 7.6%
Ret/ On Assets - 3 Yr. Avg. 7.9%
Return On Total Capital 10.3%
Ret/ On T. Cap. - 3 Yr. Avg. 11.1%
Return On Equity 10.3%
Return On Equity - 3 Yr. Avg. 11.1%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 85.7%
Gross Margin - 3 Yr. Avg. 85.6%
EBITDA Margin 19.4%
EBITDA Margin - 3 Yr. Avg. 18.3%
Operating Margin 16.6%
Oper. Margin - 3 Yr. Avg. 18.8%
Pre-Tax Margin 16.6%
Pre-Tax Margin - 3 Yr. Avg. 16.7%
Net Profit Margin 12.9%
Net Profit Margin - 3 Yr. Avg. 12.9%
Effective Tax Rate 22.2%
Eff/ Tax Rate - 3 Yr. Avg. 23.2%
Payout Ratio 0%

CYBR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CYBR stock intrinsic value calculation we used $343 million for the last fiscal year's total revenue generated by CyberArk Software Ltd.. The default revenue input number comes from 0001 income statement of CyberArk Software Ltd.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CYBR stock valuation model: a) initial revenue growth rate of 31.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CYBR is calculated based on our internal credit rating of CyberArk Software Ltd., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CyberArk Software Ltd..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CYBR stock the variable cost ratio is equal to 67.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $66 million in the base year in the intrinsic value calculation for CYBR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for CyberArk Software Ltd..

Corporate tax rate of 27% is the nominal tax rate for CyberArk Software Ltd.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CYBR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CYBR are equal to 16.8%.

Life of production assets of 10.2 years is the average useful life of capital assets used in CyberArk Software Ltd. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CYBR is equal to -25.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $466.77 million for CyberArk Software Ltd. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 35.618 million for CyberArk Software Ltd. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CyberArk Software Ltd. at the current share price and the inputted number of shares is $4.0 billion.

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