CyberArk Software Ltd. (NASDAQ: CYBR)
On Wednesday, CyberArk Software, the Israeli based cybersecurity company surged more than 25% intraday on rumors that fellow Israeli cybersecurity firm Check Point Software was interested in acquiring the company. The stock did eventually succumb to heavy broad market selling pressure and closed up 19.6% at $45.27. The move came on heavy volume with 7.3 million shares trading versus average daily volume of 1.17 million shares.
Reports of the takeover talks between CyberArk and Check Point first surfaced in an Israeli newspaper that cited unnamed sources and noted that the talks are in early stages. The news does not come as a surprise as analysts across the sector have forecast a slew of mergers in 2016. Check Point has $3.6 billion in cash and, in an effort to stymie competition, recently acquired two much smaller cyber security companies. An acquisition of CyberArk would mark a dramatic departure from the profile of those recent takeovers, however several analysts believe that the deal would make sense.
“If such a transaction were to occur, we think the financial benefit to Check Point would be a net positive with added growth and expense synergies long term,” Barclays analyst Saket Kalia wrote in a research note. CyberArk “represents a specialist in a growing market and this is not the first time we have heard news rumblings.” Bloomberg Business
“CyberArk’s vulnerability-management solutions are best of breed and would fit well into Check Point’s vast network product footprint, offering ample cross-selling (and) be accretive with minimal overlap,” wrote. FBR analyst Daniel Ives said Wednesday. Investors Business Daily
CYBR Technical Analysis
CyberArk first traded publicly in September 2104 at $25 per share. By June 2015 the stock reached all-time highs of $76.35 giving it a lofty valuation propelled by virtually every organization craving protection from an endless stream of worldwide cyber hacks. Since those highs, CYBR has been on a slow grind lower and may have bottomed earlier this week at 11 month lows of $36.34. Wednesday’s trading propelled the stock up 25% to a high of $47.50, but the move might be attributed to perma-bulls looking for a bullish stock in a sea of red. The CYBR move could play out quickly. If the market stays in correction mode, CYBR could find support near $45.00 where it held on several tests intraday on Wednesday. A break of $44.50 on volume likely tests Wednesday low of the day near $43.96. Below that and gap fill to $39.30 is in play. In a less likely scenario, rumors build and/or institutions show signs of accumulation, and CYBR buyers step in. On bullish strength if the stock gets through $46 and then through $47.50 on volume it has room to run to $51.70.
CyberArk Company Profile
CyberArk Software Ltd is an Israel-based security company. The Company’s provides information technology security solutions that protect organizations from cyber attacks. The Company’s products include CyberArk Shared Technology Platform, Privileged Account Security Solution and Sensitive Information Management Solution. It offers Privileged Account Security Solution, a solution to protect, monitor, detect, alert, and respond to privileged accounts. The company also provides Enterprise Class Integration for devices, networks, applications, and servers. It’s CyberArk Privileged Session Manager that isolates, controls, and monitors privileged user access and activities. It’s CyberArk Sensitive Information Management Solution, a platform for sharing and distributing information to users across systems using Web, desktop, mobile, and email. Google Finance