Critical Survey: CyberArk Software (NASDAQ:CYBR) versus Red Cat (NASDAQ:RCAT)

CyberArk Software (NASDAQ:CYBR) and Red Cat (NASDAQ:RCAT) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Insider & Institutional Ownership

91.8% of CyberArk Software shares are owned by institutional investors. Comparatively, 38.0% of Red Cat shares are owned by institutional investors. 1.4% of CyberArk Software shares are owned by insiders. Comparatively, 30.5% of Red Cat shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for CyberArk Software and Red Cat, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CyberArk Software	0	1	23	0	2.96
Red Cat	0	0	1	0	3.00

CyberArk Software currently has a consensus price target of $290.83, indicating a potential upside of 3.87%. Red Cat has a consensus price target of $4.00, indicating a potential upside of 45.45%. Given Red Cat’s stronger consensus rating and higher probable upside, analysts plainly believe Red Cat is more favorable than CyberArk Software.

Profitability

This table compares CyberArk Software and Red Cat’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CyberArk Software	-3.20%	-2.51%	-0.98%
Red Cat	-206.42%	-52.40%	-47.59%

Volatility & Risk

CyberArk Software has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Red Cat has a beta of -0.09, meaning that its share price is 109% less volatile than the S&P 500.

Valuation & Earnings

This table compares CyberArk Software and Red Cat’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CyberArk Software	$860.60 million	13.75	-$66.50 million	($0.64)	-437.52
Red Cat	$17.84 million	11.45	-$24.05 million	($0.52)	-5.29

Red Cat has lower revenue, but higher earnings than CyberArk Software. CyberArk Software is trading at a lower price-to-earnings ratio than Red Cat, indicating that it is currently the more affordable of the two stocks.

Summary

CyberArk Software beats Red Cat on 8 of the 14 factors compared between the two stocks.

About CyberArk Software

CyberArk Software Ltd., together with its subsidiaries, develops, markets, and sells software-based identity security solutions and services in the United States, Europe, the Middle East, Africa, and internationally. Its solutions include Privileged Access Manager, which offers risk-based credential security and session; Vendor Privileged Access Manager combines Privileged Access Manager and Remote Access to provide secure access to third-party vendors; Dynamic Privileged Access, a SaaS solution that provides just-in-time access to Linux Virtual Machines; Endpoint Privilege Manager, a SaaS solution that secures privileges on the endpoint; and Secure Desktop, a solution that protects access to endpoints. The company also provides workforce identity, which offers adaptive multi-factor authentication (MFA), single sign-on, secure web sessions, workforce password management, application gateway, identity lifecycle management, and directory services; and customer identity services that provides authentication and authorization services, MFA, directory, and user management. In addition, it offers Secrets Manager Credential Providers to provide and manage the credentials used by third-party solutions; Conjur Enterprise and Conjur Cloud, which offers a secrets management solution for specific requirements; Secrets Hub, a centralized visibility and management platform; Cloud Security solutions; Identity Management solutions, including lifecycle management, identity flows, identity compliance, and directory services; and Secure Browser. The company serves financial services, manufacturing, insurance, healthcare, energy and utilities, transportation, retail, technology, and telecommunications industries; and government agencies. The company was incorporated in 1996 and is headquartered in Petah Tikva, Israel.

About Red Cat

Red Cat Holdings, Inc. engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment. Red Cat Holdings, Inc. is based in San Juan, Puerto Rico.