CyberArk Software Ltd. (NASDAQ: CYBR) saw its shares plummet 5.05% in intraday trading on Thursday, following the announcement of a merger agreement with Palo Alto Networks, Inc. (NYSE: PANW). The cybersecurity firm's stock experienced significant volatility as investors and analysts reacted to the news of the impending acquisition.

According to the merger agreement, CyberArk will become a wholly-owned subsidiary of Palo Alto Networks upon completion of the deal. While the boards of directors of both companies have unanimously approved the merger, the market's initial reaction appears to be cautious. The stock's decline may reflect concerns about the deal's valuation, potential regulatory hurdles, or uncertainty regarding the combined company's future prospects in the competitive cybersecurity landscape.

In response to the merger news, several analysts have adjusted their ratings and price targets for CyberArk. BTIG, UBS, Guggenheim, Piper Sandler, and Wedbush all downgraded the stock to Neutral from their previous Buy or Outperform ratings. Stifel also cut its rating to Hold from Buy. Despite these downgrades, some analysts remain optimistic, with Mizuho, D.A. Davidson, and Needham raising their price targets. The mixed analyst reactions highlight the complexity of the situation and may contribute to the stock's volatility as investors reassess CyberArk's standalone value in light of the pending acquisition.