The shares of the number of IT security stocks are declining after one of the names in the sector, CyberArk (CYBR), issued a negative pre-announcement last night. Analysts had mixed views on CyberArk following its results, as some downgraded the shares while other defended the stock.

PRE-ANNOUNCEMENT: CyberArk lowered its revenue view for Q2 to a range of $57M- $57.5M from its prior view of $61M-$62M. Analysts were expecting $61.94M. The company expects license revenue in the range of $30M-$30.5M and operating income of $8.5M-$8.9M. The company blamed the shortfall on its failure to close a number of deals in its Europe, Middle East, Africa region.

DOWNGRADES: JPMorgan analyst Sterling Auty downgraded CyberArk to Neutral from Overweight and lowered his estimates in response to the negative pre-announcement while cutting his price target on the name to $45 from $63. Also downgrading the shares was Deutsche Bank's Karl Keirstead, who cut his rating to Hold from Buy. He believes that investors should wait for more certainty on the company's ability to accelerate its growth before buying the stock. Keirstead cut his price target on the shares to $45 from $60. Research firm Stephens also downgraded the stock, lowering its rating on the shares to Equal Weight from Overweight. 

DEFENSES: JMP Securities analyst Erik Suppiger says that the company's European market is "volatile," possibly due to the implementation of IT security regulations there or "the recent wave of ransomware attacks." The analyst says that the company's endpoint solution for privilege management performed well and he expects its growth to rise "comfortably above 20%." He cut his price target on the shares to $53 from $62 but kept an Outperform rating on the stock. CyberArk's Privilege Access Management tools are necessary, and the new European IT security regulations should revitalize its growth, wrote Needham's Alex Henderson. He lowered his price target on the shares to $55 from $62 but kept a Buy rating on the stock.

PRICE ACTION: In morning trading, CyberArk sank 16% to $42.86. Among other IT security names, FireEye (FEYE) slid 2%, while Palo Alto Networks (PANW) dipped 0.7% and Symantec (SYMC) gave back 1.4%.