Sometimes you can do everything right and still watch your stock drift lower. That's the position CyberArk Software Ltd (CYBR) finds itself in after delivering what most companies would consider a banner quarter.

DA Davidson analyst Rudy Kessinger clearly isn't worried about the fundamentals. He upgraded his price target from $518 to $573 on Wednesday while keeping his Buy rating intact, pointing to subscription momentum that's accelerating rather than fading.

The Numbers Tell a Growth Story

CyberArk's fourth-quarter results showed revenue hitting $372.7 million with adjusted earnings per share of $1.33. The profit figure came in slightly below Kessinger's expectations, but the revenue mix is what caught his attention. Subscription revenue jumped 28% year-over-year to $310.5 million, now representing 83% of total revenue. Even more impressive, recurring revenue accounted for 96% of the total, the kind of predictable business model that usually makes Wall Street swoon.

The annual recurring revenue picture looks equally healthy. Total ARR climbed 23% to reach $1.44 billion, while subscription ARR grew approximately 29% on an organic basis. Net new ARR bounced back sharply from the previous quarter, driven by those accelerating subscription contributions that suggest customer demand remains robust.

Caught Between Quarters

Here's where things get awkward. With Palo Alto Networks Inc (PANW) in the process of acquiring CyberArk, the company isn't holding earnings calls or providing forward guidance. It's the corporate equivalent of being engaged but not yet married—you can't really make plans, but everyone's watching anyway.

That uncertainty hasn't stopped Kessinger from updating his model. He's projecting first-quarter revenue of $378.6 million with EPS of $1.35, and he's now valuing CyberArk in line with Palo Alto Networks itself, suggesting he sees the deal bringing the companies onto equal footing.

Operating margins came in a touch lower than expected due to higher costs, though free cash flow beat forecasts, which tends to matter more for long-term sustainability. The analyst noted that both subscription and total net new ARR levels hit records, rising roughly 20% to 30% organically year-over-year.

Despite the analyst enthusiasm, CYBR shares traded down 1.61% to $400.46 on Thursday, stuck in that acquisition limbo where good results don't necessarily translate to immediate share price momentum.