Yahoo Finance While shareholders of CyberArk Software (NASDAQ:CYBR) are in the black over 5 years, those who bought a week ago aren't so fortunate
It hasn't been the best quarter for CyberArk Software Ltd. (NASDAQ:CYBR) shareholders, since the share price has fallen 25% in that time. But in stark contrast, the returns over the last half decade have impressed. Indeed, the share price is up an impressive 165% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Ultimately business performance will determine whether the stock price continues the positive long term trend.
Although CyberArk Software has shed US$268m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
View our latest analysis for CyberArk Software
CyberArk Software isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 5 years CyberArk Software saw its revenue grow at 16% per year. That's well above most pre-profit companies. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 21% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. To our minds that makes CyberArk Software worth investigating - it may have its best days ahead.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
CyberArk Software is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for CyberArk Software in this interactive graph of future profit estimates.
A Different Perspective
While it's certainly disappointing to see that CyberArk Software shares lost 1.3% throughout the year, that wasn't as bad as the market loss of 20%. Longer term investors wouldn't be so upset, since they would have made 21%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for CyberArk Software you should know about.
Of course CyberArk Software may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
