Contrasting CyberArk Software (NASDAQ:CYBR) and Palo Alto Networks (NASDAQ:PANW)

Palo Alto Networks (NASDAQ:PANW) and CyberArk Software (NASDAQ:CYBR) are both large-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.

Insider and Institutional Ownership

79.8% of Palo Alto Networks shares are owned by institutional investors. Comparatively, 91.8% of CyberArk Software shares are owned by institutional investors. 2.5% of Palo Alto Networks shares are owned by insiders. Comparatively, 1.4% of CyberArk Software shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Palo Alto Networks has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, CyberArk Software has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Palo Alto Networks and CyberArk Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palo Alto Networks	2	12	27	0	2.61
CyberArk Software	0	17	14	0	2.45

Palo Alto Networks presently has a consensus price target of $217.0103, indicating a potential upside of 25.04%. CyberArk Software has a consensus price target of $435.1071, indicating a potential upside of 4.96%. Given Palo Alto Networks’ stronger consensus rating and higher probable upside, research analysts plainly believe Palo Alto Networks is more favorable than CyberArk Software.

Profitability

This table compares Palo Alto Networks and CyberArk Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palo Alto Networks	13.95%	19.48%	5.77%
CyberArk Software	-13.78%	0.44%	0.27%

Earnings and Valuation

This table compares Palo Alto Networks and CyberArk Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palo Alto Networks	$8.03 billion	14.42	$2.58 billion	$1.75	99.17
CyberArk Software	$1.00 billion	20.48	-$93.46 million	($3.37)	-123.01

Palo Alto Networks has higher revenue and earnings than CyberArk Software. CyberArk Software is trading at a lower price-to-earnings ratio than Palo Alto Networks, indicating that it is currently the more affordable of the two stocks.

Summary

Palo Alto Networks beats CyberArk Software on 11 of the 14 factors compared between the two stocks.

About Palo Alto Networks

Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; and Panorama, a security management solution for the global control of network security platform as a virtual or a physical appliance. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. In addition, the company offers cloud security, secure access, security operations, and threat intelligence and security consulting; professional services, including architecture design and planning, implementation, configuration, and firewall migration; education services, such as certifications, as well as online and in-classroom training; and support services. It sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications. Palo Alto Networks, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.

About CyberArk Software

CyberArk Software Ltd., together with its subsidiaries, develops, markets, and sells software-based identity security solutions and services in the United States, Europe, the Middle East, Africa, and internationally. Its solutions include Privileged Access Manager, which offers risk-based credential security and session; Vendor Privileged Access Manager combines Privileged Access Manager and Remote Access to provide secure access to third-party vendors; Dynamic Privileged Access, a SaaS solution that provides just-in-time access to Linux Virtual Machines; Endpoint Privilege Manager, a SaaS solution that secures privileges on the endpoint; and Secure Desktop, a solution that protects access to endpoints. The company also provides workforce identity, which offers adaptive multi-factor authentication (MFA), single sign-on, secure web sessions, workforce password management, application gateway, identity lifecycle management, and directory services; and customer identity services that provides authentication and authorization services, MFA, directory, and user management. In addition, it offers Secrets Manager Credential Providers to provide and manage the credentials used by third-party solutions; Conjur Enterprise and Conjur Cloud, which offers a secrets management solution for specific requirements; Secrets Hub, a centralized visibility and management platform; Cloud Security solutions; Identity Management solutions, including lifecycle management, identity flows, identity compliance, and directory services; and Secure Browser. The company serves financial services, manufacturing, insurance, healthcare, energy and utilities, transportation, retail, technology, and telecommunications industries; and government agencies. The company was incorporated in 1996 and is headquartered in Petah Tikva, Israel.