What a $19 Million CyberArk Buy Signals for Long-Term Investors Amid a 43% Stock Surge

London-based Sand Grove Capital Management initiated a new position in CyberArk Software Ltd. (NASDAQ:CYBR), adding 39,121 shares worth an estimated $18.90 million, per a November 14 SEC filing.

What Happened

According to a filing with the Securities and Exchange Commission dated November 14, Sand Grove Capital Management LLP reported a new position in CyberArk Software Ltd. (NASDAQ:CYBR), buying 39,121 shares. The position was valued at $18.9 million as of September 30.

What Else to Know

This was a new position for Sand Grove, representing 9.23% of 13F reportable assets under management as of quarter-end.

Top five holdings after the filing:

• NYSE:TXNM: $33.54 million (16.4% of AUM)
• NYSE:K: $26.73 million (13.1% of AUM)
• NYSE:NSC: $25.35 million (12.4% of AUM)
• NASDAQ:MRUS: $22.54 million (11.0% of AUM)
• NASDAQ:EA: $22.44 million (11.0% of AUM)

As of Tuesday, CyberArk shares were priced at $454.34, up 43% over the past year and solidly outperforming the S&P 500, which is up about 15% in the same period.

Company Overview

Company Snapshot

• CyberArk Software provides privileged access management, identity security, endpoint protection, and cloud entitlement management solutions, with a focus on software and SaaS offerings.
• The company serves enterprise customers across sectors such as financial services, healthcare, manufacturing, energy, technology, and government agencies worldwide.
• It operates globally with a direct sales force and a network of distributors, systems integrators, and managed security service providers.

CyberArk Software Ltd. is a global leader in identity security and privileged access management. The company leverages a robust SaaS and software platform to address complex cybersecurity needs for large enterprises and institutions. Its strategic focus on recurring revenue streams and comprehensive security solutions positions it as a critical partner for organizations managing sensitive digital assets and regulatory compliance.

Foolish Take

Buying into a stock that’s been rallying over the past year is certainly an interesting move. And here, as you could expect, it looks more like an endorsement of business momentum that is still compounding rather than peaking. CyberArk’s third-quarter results help explain the confidence. Total revenue jumped 43% year over year to $342.8 million, while subscription revenue climbed 60% to $280.1 million. Annual recurring revenue reached $1.34 billion, up 45%, with subscriptions now representing 86% of the total. That mix matters. It gives the company far more visibility than it had even a few years ago and supports sustained reinvestment without leaning on capital markets.

The CyberArk position represents more than 9% of the fund’s reported assets, placing it alongside industrials, consumer staples, and railroads that anchor the portfolio. That suggests a view of CyberArk less as a high beta trade and more as a durable infrastructure for enterprise security. In other words, CyberArk is being treated as a compounding platform business, not a one-cycle cybersecurity play. When funds make that shift, it is usually because the revenue engine looks built to last.

Glossary

Assets Under Management (AUM): The total market value of assets that a fund or investment firm manages on behalf of clients.
13F Reportable Assets: U.S. publicly traded securities that institutional investment managers must disclose quarterly in SEC Form 13F filings.
Position: The amount of a particular security or investment held by an individual or institution.
Privileged Access Management: Security solutions that control and monitor access to critical systems and sensitive information by users with elevated permissions.
Identity Security: Technologies and processes that protect digital identities and control access to systems and data.
Endpoint Protection: Security measures designed to safeguard devices like computers and mobile phones from cyber threats.
Cloud Entitlement Management: Tools that manage and monitor user permissions and access rights within cloud computing environments.
SaaS (Software as a Service): Software delivered online via subscription, rather than installed locally on devices.
Outperforming: Achieving a higher return or better results than a benchmark or comparable investment.
Top Five Holdings: The five largest investments in a portfolio, typically by market value.
Filing: An official document submitted to a regulatory authority, often detailing financial or investment information.
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 TXNM Energy, Inc. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.