Cybersecurity company CyberArk shares moved higher after analysts at Bank of America said the firm is poised to capitalize on the escalating importance of Privileged Access Management (PAM) in cybersecurity.
Over 80% of cyberattacks are attributed to identity exploitation, emphasizing the need for advanced identity security measures, especially focusing on privileged account identities.
Recent high-profile breaches at MGM and Clorox have once again underscored the need for robust PAM, analysts noted.
As a result, Bank of America analysts have raised CYBR's Price Objective (PO) to $198 based on 8x EV/Sales for CY24.
“The growing importance of identity security, and more important, privileged account identity, is the basis for our positive stance on CyberArk,” analysts wrote.
“In today's digital landscape, identities serve as the network perimeter, highlighting the criticality of robust identity security, especially given the proliferation of AI which enables intruders to better mimic and duplicate unique credentials like voice and video.”
Emerging technologies, particularly generative AI, have made traditional identity security methods easier to bypass. Social engineering and phishing scams have become more realistic and sophisticated, making basic security measures like Multi-Factor Authentication (MFA) and Single Sign-On (SSO) susceptible to breaches. Attackers leverage AI to initiate voice and video phishing campaigns, challenging the efficacy of conventional security practices.
PAM presents an additional layer of protection, ensuring that even if standard security measures are bypassed, privileged accounts, which have access to critical infrastructure and digital assets, remain tightly controlled and secure.
Analysts noted that CyberArk currently trades at a discount compared to its cybersecurity peers, which according to BofA is a “temporary” underappreciation.
The PAM market growth will be driven by enhanced cybersecurity measures and the increasing requirements for cyber insurance, boosting CYBR's valuation and market position.
Shares of CyberArk were up around 2.5% on Wednesday morning at $170.73.