CyberArk Software (NASDAQ:CYBR) is an Israel-based cybersecurity firm that focuses on privileged access management (PAM).

Before I get into why the PAM industry is expected to have a compounded annual growth rate (CAGR) topping 30% through 2023, a quick look at its performance in the past year will give you a good idea why it’s worth talking about now.

CYBR stock is up 98% year to date and 118% in the past 12 months. That’s some pretty big growth for a company with a $5.4 billion market cap.

The thing is, it also has a PE of 100 now, which certainly matches its stock performance, but is also a potential yellow flag (at least) for the stock moving forward.

CYBR’s Bread and Butter

At the very least, this is a good time to dig a little deeper into what CYBR does and how much more growth is out there.

Basically, PAM is a focused part of the larger cybersecurity industry. There are many ways to create secure operating environments and there are many different needs depending upon whether you’re an individual, a corporate client, an administrator, developer, cloud services provider, etc.

PAM is fundamentally focused on IT infrastructure and the people that build those architectures. The people that build and maintain the networks and systems for a given organization have privileged access to the system itself.

They can go in and change protocols and security, provide and deny access to outside systems, and do all the maintenance necessary to keep the entire system up and running, as well as secure.

If hackers gain access to privileged access managers’ accounts, the entire system is at risk. The hackers have the golden ring and are at the heart of a system.

One recent example of what can happen when PAMs aren’t set up is the election tampering that the Russians pulled off during the 2016 election. The hacking of the DNC and the DCCC were accomplished because there was no PAM software running to keep the hackers from moving up the chain of command until they controlled system administrators’ accounts.

You can imagine how enterprise organizations feel about being exposed like this.

CYBR is an industry leader in PAM software that basically builds a security fence around privileged users’ accounts. The fence prevents hackers that access the system from getting their hands on the most important accounts.

There are other companies in this space, but CYBR is the major player and that’s why its growth has been so rapid.

CYBR Stock Moving Forward

Currently it has scores of companies using its products – Adobe (NASDAQ:ADBE), ADP (NASDAQ:ADP), AstraZeneca (NYSE:AZN), Enbridge (NYSE:ENB), Pfizer (NYSE:PFE) and Qualcomm (NASDAQ:QCOM), just to name a handful. As you can see by this partial client list, these are firms that are tech-savvy and have the kind of data that needs the utmost security.

But its clients are also food companies and a variety of other firms.

PAM is a new, hot sector, but it’s more than a flash in the pan. As government-sponsored and private hackers start amping up their games, new systems need to be there to stop the new wave of ransomware and attacks that are already getting past decent security measures.

Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.