Square (SQ) & Cyberark Software (CYBR) Critical Contrast

Square (NYSE: SQ) and Cyberark Software (NASDAQ:CYBR) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Institutional and Insider Ownership

53.3% of Square shares are owned by institutional investors. Comparatively, 76.2% of Cyberark Software shares are owned by institutional investors. 32.7% of Square shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Square and Cyberark Software, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Square 1 13 21 0 2.57
Cyberark Software 0 8 8 0 2.50

Square currently has a consensus target price of $36.80, indicating a potential downside of 16.55%. Cyberark Software has a consensus target price of $49.13, indicating a potential downside of 0.05%. Given Cyberark Software’s higher probable upside, analysts clearly believe Cyberark Software is more favorable than Square.

Profitability

This table compares Square and Cyberark Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Square -3.04% -7.98% -3.18%
Cyberark Software 6.12% 6.88% 5.03%

Earnings & Valuation

This table compares Square and Cyberark Software’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Square $1.71 billion 10.03 -$171.59 million ($0.17) -259.41
Cyberark Software $261.70 million 6.53 $16.01 million $0.44 111.73

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

Summary

Cyberark Software beats Square on 8 of the 13 factors compared between the two stocks.

About Square

Square, Inc. (Square) is a commerce ecosystem. The Company enables its sellers start, run and grow their businesses. It combines software with hardware to enable sellers to turn mobile devices and computing devices into payments and point-of-sale solutions. Once a seller downloads the Square Point of Sale mobile application, they can take their first payment. With its offering, a seller can accept payments in person via magnetic stripe (a swipe), Europay, MasterCard, and Visa (EMV) (a dip), or Near Field Communication (NFC) (a tap); or online via Square Invoices, Square Virtual Terminal, or the seller’s Website. Once on its system, sellers gain access to technology and features, such as reporting and analytics, next-day settlements, digital receipts, payment dispute management and chargeback protection, and Payment Card Industry (PCI) compliance. On the consumer (buyer) side, Square Cash offers individuals access to a way to send and receive money.

About Cyberark Software

CyberArk Software Ltd is an Israel-based provider of information technology (IT) security solutions that protects organizations from cyber-attacks. The Company’s software solutions are focused on protecting privileged accounts, which have become a critical target in the lifecycle of cyber-attacks. The Company’s Privileged Account Security Solution consists of various products, such as Shares Technology Platform, Enterprise Password Vault, SSH Key Manager, Privileged Session Manager, Privileged Threat Analytics, Application Identity Manager, CyberArk-Conjur, Endpoint Privilege Manager and On-Demand Privileges Manager. The Company’s products provide protection against external and internal cyber threats and enables detection and neutralization of attacks. The Company’s Enterprise Password Vault provides customers with a tool to manage and protect all privileged accounts across an entire organization, including physical, virtual or cloud-based assets.

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