Nepsis Liquidates $14 Million CyberArk Software (NASDAQ: CYBR) Position: Did the Stock Soar Too High, Too Fast?

Nepsis Inc. fully exited its position in CyberArk Software (NASDAQ:CYBR), selling 34,236 shares in Q3 2025 for an estimated $13.93 million, SEC filings show.

What happened

According to a filing with the U.S. Securities and Exchange Commission dated October 23, 2025, Nepsis liquidated its entire holding in CyberArk Software (CYBR) during the third quarter.

The fund sold all 34,236 shares, with an estimated trade value of $13.93 million based on average prices during Q3 2025.

This exit reduced its exposure in the cybersecurity company to zero.

What else to know

The fund’s full exit from CyberArk brings its post-trade exposure to 0% of reportable AUM.

Top holdings after the filing:

1. United Therapeutics: $18.62 million (5.9% of AUM) as of Q3 2025
2. Advanced Micro Devices: $18.46 million (5.9% of AUM) as of Q3 2025
3. Shopify: $18.13 million (5.75% of AUM) as of 2025-09-30
4. Devon Energy: $16.50 million (5.23% of AUM) as of 2025-09-30
5. Super Micro Computer: $16.25 million (5.15% of AUM) as of 2025-09-30

As of October 23, 2025, shares of CyberArk were priced at $507.04, reflecting a 75.5% one-year increase and 54 percentage points of alpha versus the S&P 500.

Company Overview

Company Snapshot

CyberArk provides privileged access management, identity and access management, endpoint security, and cloud entitlement solutions, with a focus on software-based and SaaS offerings for securing critical IT infrastructure.

CyberArk's customer base spans financial services, manufacturing, insurance, healthcare, energy, transportation, retail, technology, telecommunications, and government sectors worldwide.

The company distributes its products through a direct sales force, distributors, systems integrators, value-added resellers, and managed security service providers.

CyberArk provides identity security and privileged access management solutions to enterprise and government clients worldwide.

The company leverages a robust SaaS and software portfolio to address evolving cybersecurity threats, supporting digital transformation and regulatory compliance for its customers.

Foolish take

Nepsis had been selling off its stake in CyberArk Software for the last four quarters, but in Q3 it fully liquidated its position in the cybersecurity leader.

Firms like Nepsis can sell off these positions for any number of reasons. However, in this case I don't believe it is so much of an indictment on CyberArk's business, but rather an opportunistic sale from the stock's recent spike in price.

CyberArk's share price has tripled in just the last two years and it now trades at an ambitious 21 times sales.

Another way to think about the company's valuation to see how "lofty" it has become, consider that management hopes to grow free cash flow (FCF) to $600 million by 2028. Using today's market capitalization of $26 billion, that leaves the stock trading at 43 times FCF it won't see until 2028 -- and that may be baking in a lot of optimism.

Viewed in this light, it may make sense for a firm like Nepsis to sell out of the position and deploy that cash elsewhere.

However, for Foolish investors, letting your winners run is generally a better route to take -- especially for a historically market-trouncing stock like CyberArk.

According to a 2024 CyberArk survey of 2,400 security decision-makers, 93% of businesses were hit by a security-related breach at some point over the last year, making the company's offerings virtually essential.

Growing its annual recurring revenue by 44% annually over the last five years, CyberArk offers the potential to quickly outgrow its valuation. Thanks to this growth rate and the AI opportunity in front of the company, current shareholders would be wise to keep holding in my opinion.

Glossary

13F reportable assets: Assets that institutional investment managers must disclose in quarterly SEC filings, typically U.S.-listed equities.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Liquidated: Sold off an entire investment position, converting it to cash or cash equivalents.
Privileged access management: Security solutions that control and monitor access to critical systems by users with elevated permissions.
Identity and access management: Processes and technologies for managing digital identities and controlling user access to resources.
Endpoint security: Protection of devices like computers and smartphones from cyber threats within a network.
Cloud entitlement solutions: Tools that manage and secure user permissions and access rights in cloud computing environments.
SaaS (Software as a Service): Software delivered online via subscription, rather than installed locally on computers.
Exposure: The degree to which a portfolio or fund is invested in a particular asset, sector, or market.
Alpha: The excess return of an investment relative to a benchmark index, indicating outperformance.
Digital transformation: The integration of digital technologies into business processes to improve efficiency and value.
TTM: The 12-month period ending with the most recent quarterly report.

Josh Kohn-Lindquist has positions in Advanced Micro Devices and Shopify. The Motley Fool has positions in and recommends Advanced Micro Devices, Shopify, and United Therapeutics. The Motley Fool has a disclosure policy.