Jefferies has raised its price target for CyberArk Software (NASDAQ:CYBR) to $400 from $340, citing strong 2025 annual recurring revenue (ARR) growth prospects and benefits from the recent Venafi acquisition.

ARR Growth: CyberArk projects a 20% YoY ARR increase for 2025, with guidance expected in the low-20% range initially, improving throughout the year.
Venafi Integration: Venafi presents significant cross-selling opportunities, potentially adding $85 million in ARR if 10% of CyberArk’s customers adopt its solutions. Jefferies advises patience as the growth impact ramps up.
Cash Flow Improvements: CyberArk expects free cash flow margins to rise from 7% in 2023 to 21%-22% in 2024, with a forecasted 26% margin by 2027 as the SaaS transition matures.
SaaS Conversions: The ongoing shift from maintenance to SaaS customers offers a 2-3x uplift in ARR, presenting a major revenue boost opportunity in the next two years.