Is CyberArk Software Ltd. overvalued or undervalued?

As of 13 February 2025, the valuation grade for CyberArk Software Ltd. has moved from attractive to risky, indicating a significant shift in its financial outlook. The company is currently considered overvalued based on its financial ratios, with a Price to Book Value of 8.36 and an EV to Sales ratio of 17.86, both of which suggest a premium valuation relative to its earnings and sales performance. Additionally, the EV to EBITDA ratio is alarmingly high at -17917.85, reflecting the company's loss-making status.
When compared to peers, CyberArk's valuation metrics stand out unfavorably. For instance, Robinhood Markets, Inc. has a P/E ratio of 41.60, while DocuSign, Inc. is valued attractively with a P/E of 13.66. In contrast, CyberArk's negative P/E and EV ratios highlight its struggles to generate profit, reinforcing the notion of overvaluation. Despite a strong recent performance, with a 1-year return of 53.90% compared to the S&P 500's 10.26%, the underlying financial metrics suggest that CyberArk may not sustain this growth, further supporting the conclusion that it is overvalued.