CyberArk Stock Up 43% in a Year — So Why Did a Major Investor Just Exit a $42 Million Position?

Praesidium Investment Management Company fully exited its position in CyberArk Software Ltd. (NASDAQ:CYBR), reducing holdings by 104,000 shares for an estimated $42.3 million.

What Happened

According to a filing submitted to the U.S. Securities and Exchange Commission on November 14, Praesidium Investment Management Company sold its entire stake in CyberArk Software Ltd. (NASDAQ:CYBR). The move involved the disposal of 104,000 shares, resulting in the elimination of the position from the firm’s portfolio for the reporting period ended September 30.

What Else to Know

CyberArk previously represented 7.5% of its reported U.S. equity assets.

Top holdings after the filing:

• NYSE: JBL: $75.8 million (14.8% of AUM)
• NASDAQ: INTA: $71.3 million (13.9% of AUM)
• NASDAQ: FROG: $70.8 million (13.8% of AUM)
• NYSE: NOW: $61.9 million (12.1% of AUM)
• NASDAQ: ALKT: $50.1 million (9.8% of AUM)

As of Tuesday, shares of CyberArk were priced at $457.70, up 43% over the past year and well above the S&P 500's 13% gain in the same period.

Company Overview

Company Snapshot

• CyberArk Software Ltd. offers a suite of software-based security solutions, including privileged access management, endpoint privilege management, cloud entitlement management, and identity and access management services.
• The company focuses on protecting privileged accounts and securing digital identities across cloud and on-premises environments.
• CyberArk serves enterprise customers across sectors such as financial services, healthcare, energy, manufacturing, and government, targeting organizations with complex security and compliance requirements.

CyberArk Software Ltd. is a global leader in identity security, specializing in protecting privileged access and digital identities for large organizations. The company leverages a comprehensive portfolio of software solutions to address evolving cybersecurity threats and generates recurring revenue primarily through licensing, subscriptions, and support services for its cybersecurity platforms. Its focus on high-value enterprise clients and robust product innovation positions CyberArk as a key player in the cybersecurity market.

Foolish Take

When a long-term, research-heavy fund walks away from a high-performing cybersecurity name, it’s worth asking what changed beneath the surface. CyberArk has surged this year (before a recent dip) and continues to post standout subscription growth—but Praesidium’s full exit suggests the valuation reset and competitive dynamics may be driving a more cautious stance despite the company’s momentum.

According to a November 14 SEC filing, Praesidium Investment Management Company sold all 104,000 of its CyberArk shares, removing what had previously been a 7.5% position from its portfolio. The firm’s exit comes as CyberArk reported strong third-quarter results: Total revenue rose 43% to $342.8 million, supported by continued expansion of its SaaS and identity-security platforms.

Even so, the stock’s 43% rally over the past year may have altered Praesidium’s risk-reward calculus. Given the fund’s hands-on, deep-research investment model—described in its strategy materials as private-equity-style engagement focused on long-term value creation—rotating out of a fully priced leader may simply reflect discipline rather than concern.

For long-term investors, CyberArk’s fundamentals remain intact. The company continues to benefit from growing identity-security budgets and a shift toward recurring SaaS revenue, though valuation and volatility warrant attention as the stock climbs.

Glossary

13F assets under management: The total value of U.S. equity securities managed by an institutional investment manager, as reported in SEC Form 13F.
AUM (Assets Under Management): The total market value of investments a fund or firm manages on behalf of clients.
Alpha: A measure of an investment's performance compared to a benchmark, showing excess return generated by active management.
Privileged access management: Security solutions that control and monitor access to critical systems and sensitive information by users with elevated permissions.
Endpoint privilege management: Tools that manage and restrict administrative rights on devices like computers and servers to reduce security risks.
Cloud entitlement management: Software that manages user permissions and access rights within cloud environments to enhance security.
Identity and access management: Systems and processes that ensure only authorized individuals can access specific resources in an organization.
Reporting period: The specific time frame covered by a financial or regulatory report, such as a quarter or fiscal year.
Stake: The ownership interest or shareholding that an investor or institution holds in a company.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intapp and ServiceNow. The Motley Fool recommends JFrog. The Motley Fool has a disclosure policy.