The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
The Nasdaq was in blood red mode Thursday. But the big drop in tech stocks didn't hurt the performance of a red hot IPO.
So why is this stock being spared from the brutal momentum sell-off? One word: Hacking.
CyberArk develops software designed to protect companies from malicious attacks by cybercriminals, so-called "hacktivists" and even government-sponsored groups engaging in industrial espionage.
The company's main product helps companies keep "privileged accounts" -- think of things such as log-in info for a big company's IT managers and passwords to social media accounts -- safe. And this looks like a very lucrative business.
Sales rose 30% in 2012 and another 40% last year. And revenue through the first six months of 2014 is up 33% from the same period in 2013.
CyberArk has also been profitable the past few years. It did lose money in the first half of 2014 -- but that was solely due to expenses tied to revaluing warrants ahead of the IPO.
Another plus for the company? It's already a worldwide player in the cybersecurity market. Nearly half of the company's sales come from outside the U.S. (CyberArk is based in Israel and has its U.S. headquarters in Newton, Mass.)
But investors need to be careful before they decide to board the CyberArk. Shares trade at more than 130 times last year's earnings. That's extremely expensive.
The company also faces competition from both pure-play cybersecurity firms such as Palo Alto Networks (PANW) and FireEye (FEYE) as well as subsidiaries of tech giants IBM (IBM), Oracle (ORCL) and Hewlett-Packard (HPQ).
Shares of the smaller pure-play cybersecurity stocks have been ridiculously volatile this year. They got a pop recently after Jennifer Lawrence and several other celebrities had their nude photos published online following a hack of their iCloud accounts.
But investors have to do their homework with these companies. Not all of them are going to thrive. Just look at how poorly FireEye's stock has done this year. Palo Alto, on the other hand, has been a Wall Street darling.
So will CyberArk turn out to be more like Palo Alto than FireEye? That's hard to say just yet.
The only thing that's clear is that CyberArk seems to have replaced Alibaba as Wall Street's favorite IPO flavor of the month.
Reader Comment of the Week! Not a good week for Apple (AAPL).
The jury's still out on whether BendGate is a real problem or not. But the company's iOS 8.0.1 update was a disaster. I thought the company was discontinuing the iPod Classic? Maybe Apple needs to give away some free music again. Oh wait. That was a PR nightmare too.
One follower said he was in the uncomfortable position of downloading iOS 8.0.1 right around the time Apple 'fessed up and pulled it. His concern about what might happen next (as well as a follow-up tweet about the Beastie Boys) win him this week's Reader Comment honors.
Ha! Hope the update went well. Go Giants, by the way.
And my advice to all of you new iPhone 6 and 6 Plus owners regarding that whole unintentional curve issue? Take the device out of your back pocket if you plan to Shake Your Rump!
It's clear who the losers were when Target (TGT) became the victim of a sophisticated security breach in December that eventually compromised the credit and debit card information of 40 million customers. But were there any winners, beyond the thieves?
It's a question many investors have been asking, especially since Target is hardly alone. The Washington Post reports that federal agents notified more than 3,000 U.S. companies last year that MOREPatrick M. Sheridan - Mar 27, 2014 11:51 AM ET
While the broader market was largely quiet Tuesday, one sector was on fire: cybersecurity.
Shares of Sourcefire (FIRE) jumped nearly 28% after networking giant Cisco (CSCO) said it agreed to buy cybersecurity firm for $2.7 billion.
The deal, which was priced at a 29% premium over Sourcefire's closing price Monday, will help Cisco bolster its network security services.
"Today's sophisticated threats are able to circumvent traditional, disparate security products," said Christopher Young, senior MOREHibah Yousuf - Jul 23, 2013 1:14 PM ET
Not a member yet?Sign up now for a free account
|Sergio Marchionne, auto legend, steps down as CEO of Fiat Chrysler|
|Fox News' Kimberly Guilfoyle leaving the network to hit campaign trail with Donald Trump Jr.|
|After plastic straws, this entrepreneur wants plastic toothbrushes to disappear|
|24% of Tesla Model 3 orders have been canceled, analyst says|
|Looking to buy your first home? Good luck with that|