N-able stock maintains Outperform rating at William Blair

Published 08/05/2025, 18:30
N-able stock maintains Outperform rating at William Blair

On Thursday, William Blair reaffirmed its Outperform rating on N-able Inc. (NYSE: NABL), after the company’s shares saw an approximate 5% increase to a midday price of $7.51. The firm’s analysts highlighted N-able’s current market valuation, noting that the stock is trading at a discounted enterprise-value-to-sales (EV/S) multiple of 3.3 times their calendar 2025 estimate. This figure contrasts with the median of 6.8 times EV/S for its peer group. According to InvestingPro data, the company currently trades at a P/E ratio of 46x and appears undervalued based on its Fair Value analysis. Despite recent price volatility, with shares down over 36% in the past six months, the company maintains impressive gross profit margins of 83.5%.

N-able, which specializes in providing cloud-based software for managed service providers, is currently navigating through several strategic changes. These include expanding its channel, investing in security products, and enhancing cross-sell and platform capabilities. These initiatives, while potentially increasing the company’s total addressable market (TAM) and accelerating growth, are also impacting its profitability and introducing some execution risks. InvestingPro analysis reveals the company has maintained healthy revenue growth of 10.5% over the last twelve months, with analysts forecasting continued profitability this year. For deeper insights into N-able’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Despite these challenges, William Blair’s stance remains positive. The firm believes that N-able’s management is taking an assertive approach that could lead to a larger TAM, faster growth, and improved operating leverage in the long run. The analysts see potential for the company to outperform within its sector, given the strategic steps it is undertaking. This optimism is supported by N-able’s solid financial health score of "GOOD" from InvestingPro, along with its strong current ratio of 1.23 and manageable debt-to-equity ratio of 0.49.

The firm’s analysts also drew attention to N-able’s enterprise-value-to-EBITDA (EV/EBITDA) multiple, which stands at 12.1 times based on their calendar 2025 estimates. This financial metric is another aspect that the analysts used to support their optimistic view on the stock’s future performance.

In conclusion, William Blair’s latest assessment suggests that despite the current transitions and associated risks, N-able’s aggressive strategy could position the company for better financial performance in the future. The firm’s analysts have expressed confidence in the company’s ability to navigate through its ongoing changes and capitalize on the resulting opportunities.

In other recent news, N-Able Inc. reported impressive first-quarter 2025 financial results, surpassing Wall Street expectations. The company achieved earnings per share (EPS) of $0.08, exceeding the forecasted $0.07, and reported revenue of $118.2 million, surpassing the expected $115.75 million. N-Able also raised its full-year revenue guidance to between $492 million and $497 million, indicating a projected 6-7% year-over-year growth. The company reported a 10% year-over-year increase in total annual recurring revenue (ARR), reaching $492.7 million, driven by strong demand in the cybersecurity market.

Additionally, N-Able’s acquisition of AdLumin contributed approximately $21 million in ARR, and the company expressed confidence in its strong sales pipeline. Analyst firms, such as Needham, noted the positive impact of the acquisition on N-Able’s growth trajectory. The company continues to focus on expanding its customer base, with 2,398 customers now generating over $50,000 in ARR each, marking a 10% increase from the previous year. N-Able’s strategic initiatives include enhancing its product offerings and expanding its go-to-market strategy to capture a broader range of channel providers.

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