Analysts Cut Price Targets on Fitbit Inc (FIT) and Cyberark Software Ltd (CYBR); Here’s Why


Wall Street analysts made changes to price targets on wearable fitness device maker Fitbit Inc (NYSE:FIT) and cybersecurity firm Cyberark Software Ltd (NASDAQ:CYBR) Thursday. Below are the changes along with current ratings and comments from lead analysts Brad Erickson and Michael W. Kim.

Fitbit Inc

With Fitbit preparing to release fourth-quarter earnings on February 22, Pacific Crest analyst Brad Erickson reiterated an Overweight rating on on the stock, while reducing the price target to $31 (from $47), which represents a potential upside of 94% from where the stock is currently trading.

Erickson explained, “We maintain upside bias to Street numbers, but are tempering our expectations based on an updated view of investor appetite for risk factors associated with FIT: potential for market saturation, competition, pricing pressure and margin erosion. GoPro is a now a cautionary tale for these types of stories, and we believe it has materially dampened the opportunity for FIT, regardless of its market opportunity or fundamentals. With 30%-plus growth and potential for modest margin expansion, to say that FIT’s current 10.3x out-year earnings multiple looks attractive is an understatement, in our view, and we remain buyers.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brad Erickson has a yearly average return of -22.3% and a 32.3% success rate. Erickson has a -49.0% average return when recommending FIT, and is ranked #3515 out of 3640 analysts.

Out of the 19 analysts polled by TipRanks, 15 rate Fitbit stock a Buy, while 4 rate the stock a Hold. With a return potential of 150%, the stock’s consensus target price stands at $40.

Cyberark Software Ltd

Imperial Capital analyst Michael W. Kim reiterated an In-Line/Neutral rating on shares of CyberArk, while slightly reducing the price target to $41 (from $42), after the company reported fourth-quarter results, posting EPS of $0.39 on $51.5 million in revenue, compared to consensus estimates of $0.20 in EPS on $43.88 million in revenue.

Kim opined, “CYBR substantially exceeded our growth expectations in 4Q15, buoyed by strong sales execution and expanding global demand for privileged account security. However, we are lowering our FY16 EPS estimates due to higher growth investments for sales and marketing and product development. We believe CYBR could significantly increase its sales capacity, raise market awareness, and expand its portfolio heading into FY17. During the conference call on 2/11/16, management highlighted its substantial “greenfield” opportunities, as numerous customer organizations remain underinvested in privileged account security. Of particular note, eight of the company’s top ten largest transactions were new to the category in FY15.”

According to TipRanks.com, analyst Brad Erickson has a yearly average return of -22% and a 32% success rate. Erickson has a -49% average return when recommending FIT, and is ranked #3515 out of 3640 analysts.

As of this writing, out of the 19 analysts polled by TipRanks, 15 rate Fitbit stock a Buy, while 4 rate the stock a Hold. With a return potential of 150%, the stock’s consensus target price stands at $40.