Ping Identity, SailPoint, CyberArk rise as KeyBanc starts at overweight
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Ping Identity Holding (PING), SailPoint Technologies (NYSE:SAIL) and CyberArk Software (NASDAQ:CYBR) all rose in premarket trading on Tuesday as investment firm KeyBanc Capital Markets initiated coverage on the trio with an overweight rating.
Analyst Eric Heath put price targets on the three cyber security names of $27, $52 and $170, respectively, noting that in a hybrid work environment, security is paramount. Additionally, there is likely to be consolidation in the space, with Microsoft (MSFT), Okta (OKTA) and CyberArk (CYBR) leading the way, while Ping and SailPoint, which are more focused, will "thrive near to medium term."
Ping Identity (PING) tacked on slightly more than 0.5% to $27.83, while SailPoint added slightly less than 0.5% to $52.66. CyberArk (CYBR) added a bit less than 0.5% to $174.81 in premarket trading.
Heath noted that identity is a top focus this year and in the long-term, after surveying chief information officers and companies that can act as consolidators, are in the cloud, have customer identity and access management offerings and strong cash flow are likely to perform well.
In addition, Heath pointed out that security is now shifting to a "zero trust model," with identity the keystone to this model. "Permanent hybrid work and recent breaches (SolarWinds, Kaseya, Colonial Pipeline) have catalyzed this shift to Zero Trust and has put Identity at the forefront," the analyst wrote.
Heath also pointed out that customer identity and access management has been a fragmented market across several different offerings, but that is evolving to a more consolidated mindset.
Other themes that are playing out in the space are customer experience being important, as consumers buy and engage with companies online, which Heath said is an "unbounded market opportunity with significant greenfield space."
The market opportunity for these companies, especially in identity, is being under-appreciated by investors, and there are several catalysts for growth, including the shift to software-as-a-service, adopting commercial customer identity and access management, increasing the number of apps, the types of identities, as well as additional regulations, executive orders from the President and expansion. 
"We see a $62 [billion] [total addressable market] with [customer identity and access management] being the largest segment," Heath wrote.
Last month, Wedbush Securities analyst Dan Ives said the next months and years ahead would be "a golden age for the cybersecurity sector," noting CyberArk (CYBR), along with several others, were leading the efforts.