$92 Million Bet: Why This Fund Made CyberArk a 12% Portfolio Position Amid a Booming Stock Rally

São Paulo-based Absolute Gestao de Investimentos Ltda. initiated a new position in CyberArk Software Ltd. (NASDAQ:CYBR), adding $92.23 million in the third quarter, according to a November 13 SEC filing.

What Happened

According to an SEC filing dated November 13, Absolute Gestao de Investimentos disclosed a new stake in CyberArk Software Ltd. (NASDAQ:CYBR), purchasing 190,897 shares. The position was valued at $92.23 million at the end of the third quarter, representing a significant allocation within the fund’s $769.14 million in reportable U.S. equity assets.

What Else to Know

The new position represented 11.99% of 13F reportable assets at quarter-end.

Top holdings after the filing:

• NASDAQ: CYBR: $92.23 million (12.19% of AUM)
• NYSEMKT: EEM: $89.72 million (11.85% of AUM)
• NYSE: GTLS: $88.22 million (11.66% of AUM)
• NYSEMKT: EWZ: $48.85 million (6.45% of AUM)
• NASDAQ: EMXC: $48.27 million (6.38% of AUM)

As of Friday, CYBR shares were priced at $454.65, up 41% over the past year and well outperforming the S&P 500, which is up 15% in the same period.

Company Overview

Company Snapshot

• CyberArk Software offers privileged access management, endpoint privilege security, cloud entitlement management, and identity and access management solutions delivered as both software and SaaS products.
• The company generates revenue primarily from software licenses, SaaS subscriptions, and support services, leveraging a recurring revenue model with a focus on enterprise cybersecurity needs.
• It serves large enterprises and organizations across financial services, healthcare, energy, technology, and government sectors, targeting customers with complex security and compliance requirements.

CyberArk Software Ltd. specializes in protecting privileged access and managing digital identities for organizations with high security demands.

The company leverages a robust recurring revenue model and serves a diversified enterprise client base across critical industries.

Foolish Take

CyberArk is in the middle of a structural shift from a high-quality security vendor to a scaled identity security platform with operating leverage finally showing up. In the third quarter, total revenue climbed 43% year over year to $342.8 million, while subscription revenue jumped 60%, pushing annual recurring revenue to $1.34 billion. More importantlycyb, non-GAAP operating margin expanded to 19%, up from 15% a year ago, showing that growth is no longer coming at the expense of profitability.

That matters in the context of this fund’s broader book. Its top positions skew toward liquid ETFs and established growth franchises, which makes CyberArk stand out as a concentrated single-stock bet tied to enterprise security spending and identity management. Unlike many cybersecurity names still selling a story, CyberArk is converting demand into cash, ending the quarter with nearly $2 billion in cash and investments and generating positive adjusted free cash flow.

At roughly 12% of reported assets, this is not a speculative flyer. It looks more like a conviction play on durable ARR growth, rising margins, and the strategic optionality created by the pending Palo Alto Networks transaction. Of course, it's unclear whether the buy came before or after the acquisition's announcement at the end of July, but the timing certainly seems opportune.

Glossary

Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
13F reportable assets: U.S. equity securities that investment managers must disclose quarterly to the SEC if managing over $100 million.
Privileged access management: Security solutions that control and monitor access to critical systems and sensitive data by users with elevated permissions.
Endpoint privilege security: Tools that manage and restrict administrative rights on devices like computers and servers to reduce security risks.
Cloud entitlement management: Systems that oversee and control user permissions and access rights within cloud computing environments.
Identity and access management (IAM): Processes and technologies for verifying users’ identities and controlling their access to resources.
SaaS: Software as a Service; cloud-based applications delivered over the internet and accessed via subscription.
Stake: The ownership interest or investment a person or entity holds in a company.
Outperforming: When an investment achieves a higher return than a benchmark or comparison index over a given period.
Filing: An official document submitted to a regulatory agency, often containing financial or ownership 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 Chart Industries. The Motley Fool has a disclosure policy.