CyberArk's Machine Identity Push: Is Venafi the Game Changer?

CyberArk CYBR is gaining traction in the fast-growing machine identity market. CyberArk’s acquisition of Venafi, a leader in machine identity management, is emerging as a key growth catalyst. In the first quarter of fiscal 2025, Venafi was included in nine of CyberArk’s top 10 deals. This reinforces Venafi’s position as a key cross-sell driver within CyberArk’s identity security platform.

Early traction is evident in notable wins. A Fortune 100 financial services firm, which is a long-time CyberArk customer on the human identity side, expanded into certificate lifecycle management and Public Key Infrastructure (PKI) offerings with a competitive multi-six-figure Annual Contract Value (ACV) deal. Another notable win includes PDS Health, a customer with CyberArk since 2019. The healthcare support organisation expanded on the machine identity side by deploying all of Venafi’s Certificate Manager and Zero Touch PKI in a six-figure ACV deal during the first quarter.

During the first quarter, management noted that machine identities now outnumber human identities by more than 80 to 1, which is up from a 45:1 ratio just a year ago. This makes machine identities one of the largest and fastest-growing attack surfaces in enterprise IT. With Venafi, CyberArk is addressing these challenges through end-to-end machine identity security, focused on visibility, governance and control.

When the acquisition closed in late 2024, CyberArk estimated that Venafi would expand its total addressable market by $10 billion to approximately $60 billion. As cloud complexity grows and machine identities continue to outnumber humans, Venafi appears well-positioned to become a foundational pillar in CyberArk’s platform-led growth strategy.

How Competitors Fare Against CYBR

CrowdStrike CRWD and Palo Alto Networks PANW are also evolving their platforms to meet enterprise security demands.

CrowdStrike is another established player in the identity security space, providing unified, real-time protection across cloud, identity and endpoint. CrowdStrike is enhancing its identity security platform with the implementation of AI copilots like Charlotte AI and agentic AI solutions like Charlotte AI Agentic Workflows.

Palo Alto Networks is doubling down on its platformization strategy. In the third quarter of fiscal 2025, PANW closed more than 90 net new platform deals. Moreover, the number of customers platformized on Cortex was up nearly three times, reflecting strong momentum with Palo Alto Networks’ Extended Security Intelligence and Automation Management or XSIAM security operation platform.

CYBR’s Price Performance, Valuation and Estimates

Shares of CyberArk have gained 19.4% year to date compared with the Zacks Security industry’s growth of 20.2%.

CYBR YTD Price Performance

From a valuation standpoint, CYBR trades at a forward price-to-sales ratio of 13.16, below the industry’s 14.5.

CYBR Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for CYBR’s 2025 and 2026 earnings implies a year-over-year increase of 25.74% and 25.72%, respectively. The estimates for 2025 and 2026 have been revised downward over the past seven days. 

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This article originally published on Zacks Investment Research (zacks.com).

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