Why One Firm Exited $11 Million CyberArk Stake as Stock Rallied 44% Over the Past Year

CYBR +2.92%

Key Points

• New York City-based G2 Investment Partners Management sold 27,578 shares of CyberArk Software Ltd—a position previously worth $11.2 million—in the third quarter.

• The move marked a full exit from CyberArk for G2, which reported holding no shares of the firm at quarter-end.

• The position previously accounted for 2.5% of fund assets.

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New York City-based G2 Investment Partners Management fully exited its position in CyberArk Software Ltd. (NASDAQ:CYBR), reflecting an $11.2 million decrease in value, per an SEC filing on November 14.

What Happened

G2 Investment Partners Management disclosed in an Securities and Exchange Commission (SEC) filing on November 14 that it sold out of its entire holding in CyberArk Software Ltd. (CYBR). The fund previously held 27,578 shares. The transaction decreased its reportable portfolio by an estimated $11.2 million based on quarterly average pricing.

What Else to Know

Top holdings after the filing:

• NASDAQ: DAVE: $29.1 million (6% of AUM)

• NYSE: PACK: $22 million (4.5% of AUM)

• NASDAQ: TSEM: $21 million (4.3% of AUM)

• NASDAQ: PRCH: $19.9 million (4.1% of AUM)

• NASDAQ: PGY: $19.3 million (4% of AUM)

As of Friday, shares of CyberArk Software Ltd. were priced at $458.59, up 44% over the past year and outperforming the S&P 500's 14% gain in the same period.

Company Overview

Metric

Value

Market Capitalization

$23.1 billion

Revenue (TTM)

$1.3 billion

Net Income (TTM)

($226.9 million)

Price (as of market close Friday)

$458.59

Company Snapshot

CyberArk Software Ltd. is a global leader in privileged access management and identity security, serving a diversified set of enterprise customers. The company leverages a robust SaaS and software platform to address evolving cybersecurity threats, focusing on protecting critical assets and credentials in hybrid and cloud environments. CyberArk's strategic emphasis on innovation and comprehensive security offerings positions it as a key player in the infrastructure software market. It targets large organizations across sectors such as financial services, healthcare, manufacturing, energy, and government, with a global customer base.

Foolish Take

G2's disclosed sale of its entire CyberArk stake comes as the stock trades near record highs after delivering some of the strongest recurring-revenue growth in the sector. The move here suggests a rotation in risk or valuation preferences, especially given CYBR’s pending acquisition by Palo Alto Networks and its increasingly subscription-heavy model, which can shift how fundamental investors size positions.According to the SEC filing, the firm liquidated all 27,578 shares in CyberArk during the third quarter, an estimated $11.2 million decrease in reportable holdings. The move comes as the manager reshapes a portfolio still concentrated in small- and mid-cap growth—its top holdings now span Dave, Ranpak, Tower Semiconductor, Porch Group, and Pagaya.CyberArk’s fundamentals, however, remain notably strong. The company $342.8 million in third-quarter revenue, up 43% year-over-year, and record net new ARR of $68 million, driving total ARR to $1.34 billion—up 45% from last year. CEO Matt Cohen highlighted demand trends tied to identity proliferation and emerging AI-security needs, noting that customers “turn to us to solve their most complex identity security challenges.” Ultimately, the takeaway is that this portfolio rebalancing doesn’t inherently signal weakness—especially when the underlying business continues to compound subscription ARR at scale ahead of a planned acquisition.

Glossary

13F: A quarterly SEC filing required from institutional investment managers to disclose their equity holdings.Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.Position: The amount of a particular security or asset held by an investor or fund.Stake: The ownership interest or share held in a company by an investor or fund.Privileged Access Management: Security solutions that control and monitor access to critical systems and sensitive information by privileged users.Endpoint Privilege Management: Tools that manage and restrict elevated access rights on individual computers or devices within an organization.Cloud Entitlement Management: Software that manages and governs user permissions and access rights in cloud environments.Identity and Access Management (IAM): Systems and policies that ensure only authorized users can access specific resources or data.SaaS (Software as a Service): A software delivery model where applications are accessed online via subscription rather than installed locally.Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.Outperforming: Achieving a higher return or growth than a benchmark or peer group.Reportable Portfolio: The portion of a fund’s holdings that must be disclosed in regulatory filings, such as the 13F.

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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Pagaya Technologies. The Motley Fool has a disclosure policy.

Why One Firm Exited $11 Million CyberArk Stake as Stock Rallied 44% Over the Past Year was originally published by The Motley Fool