Critical Comparison: Dropbox (NASDAQ:DBX) and CyberArk Software (NASDAQ:CYBR)

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

Earnings & Valuation

This table compares Dropbox and CyberArk Software”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dropbox	$2.55 billion	3.01	$453.60 million	$1.41	18.05
CyberArk Software	$1.00 billion	15.14	-$93.46 million	($1.95)	-157.16

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dropbox	17.75%	-132.63%	19.58%
CyberArk Software	-9.34%	0.45%	0.24%

Risk & Volatility

Dropbox has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, CyberArk Software has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Insider and Institutional Ownership

94.8% of Dropbox shares are held by institutional investors. Comparatively, 91.8% of CyberArk Software shares are held by institutional investors. 28.6% of Dropbox shares are held by insiders. Comparatively, 1.4% of CyberArk Software shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Dropbox and CyberArk Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dropbox	0	2	1	0	2.33
CyberArk Software	0	1	26	1	3.00

Dropbox currently has a consensus target price of $27.67, indicating a potential upside of 8.71%. CyberArk Software has a consensus target price of $418.04, indicating a potential upside of 36.41%. Given CyberArk Software’s stronger consensus rating and higher probable upside, analysts clearly believe CyberArk Software is more favorable than Dropbox.

Summary

Dropbox beats CyberArk Software on 8 of the 15 factors compared between the two stocks.

About Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

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.