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On Thursday, JPMorgan analyst Brian Essex increased the price target on Tenable Holdings Inc . (NASDAQ:TENB) to $53.00, up from the previous target of $50.00, while maintaining an Overweight rating on the stock. The adjustment follows Tenable’s recent performance, which surpassed expectations in terms of growth and profitability. According to InvestingPro data, the company’s market capitalization stands at $5.19 billion, with analysts’ targets ranging from $40 to $55, suggesting further upside potential.
Tenable reported significant growth this quarter, driven by large deals and the successful adoption of its Tenable One and Exposure Solution products. The company’s Cyber Exposure platform, Tenable One, and its differentiation in the Vulnerability Management (VM) space contributed to competitive wins, particularly among Fortune 500 companies. InvestingPro data reveals impressive revenue growth of 14% and an outstanding gross profit margin of 77.55%, highlighting the company’s strong market position. InvestingPro subscribers can access 7 additional key insights about Tenable’s financial health and growth prospects.
The company also demonstrated a strong non-GAAP operating margin of 25.2% for the fourth quarter. While operating with a moderate debt level, as noted in InvestingPro’s analysis, Tenable has adopted a conservative stance in its FY25 billings and revenue outlook due to federal exposure. The company has not observed any contract cancellations or changes in federal projects, though there is some uncertainty regarding the timing of certain federal transactions, which it attributes to the ongoing continuing resolution, operational challenges, and personnel changes.
In addition to R&D investments, Tenable plans to expand its sales force in FY25. The guidance suggests an expectation of a further 200 basis points in margin expansion for the year. While the company’s outlook on Cyber Exposure business from the federal government is cautious, it is not included in the 15% of revenue typically derived from the public sector, which also encompasses state and local business.
Essex noted the company’s robust free cash flow (FCF) outlook as a key factor in the raised price target. With the stock trading at 14.5 times JPMorgan’s FY26 FCF estimates based on the previous day’s closing price and a forecast of over 20% FCF growth in the coming years, the firm remains optimistic about Tenable’s prospects. The company generated significant free cash flow of $172.53 million in the last twelve months, supporting its growth initiatives while maintaining financial flexibility.
In other recent news, Tenable Holdings, Inc. reported a successful fourth quarter, with earnings and revenue surpassing analyst projections. The company reported adjusted earnings per share of $0.41, which exceeded the analyst consensus of $0.34. In addition, revenue for the quarter was $235.7 million, marking an 11% year-over-year increase and exceeding the $231.54 million analysts had anticipated.
Despite this, Tenable’s outlook for the first quarter and full year 2025 fell short of expectations, impacting investor sentiment. The company’s Q1 revenue guidance of $232-234 million and adjusted EPS of $0.28-$0.30 were both below consensus estimates. For the full year 2025, Tenable projects revenue of $971-981 million and adjusted EPS of $1.52-$1.60, compared to consensus estimates of $982.9 million in revenue and $1.45 EPS.
Recent developments also include the addition of 485 new enterprise platform customers and 135 net new six-figure customers in the fourth quarter. Furthermore, Tenable announced plans to acquire Vulcan Cyber Ltd., a move aimed at enhancing its exposure management platform capabilities. These are the latest updates in the company’s operations.
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