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On Wednesday, Scotiabank (TSX:BNS) adjusted its price target on Tenable (NASDAQ:TENB), a cybersecurity company with a market capitalization of $4.05 billion and impressive gross profit margins of 78%, to $30.00 from the previous target of $45.00. According to InvestingPro data, analyst targets for Tenable range from $28 to $52, reflecting diverse market opinions about this moderately leveraged company. Despite this change, the firm maintained its Sector Perform rating on the stock. The revision followed Tenable’s first-quarter performance, where the company’s current billings matched expectations, but its guidance for the year 2025 was reduced. The company has maintained steady growth, with revenue increasing by 11.8% over the last twelve months to $923.2 million. InvestingPro analysis suggests the company is currently trading slightly below its Fair Value, with additional insights available in the comprehensive Pro Research Report.
Scotiabank’s analysis indicated that Tenable’s management is exercising caution due to macroeconomic uncertainty, particularly concerning the U.S. public sector, which has been highlighted as an area of concern since the fourth quarter. The firm observed that Tenable’s organic profitability during the first quarter was consistent with the surprises seen in recent periods. However, the 2025 target, adjusted to include the acquisition of Vulcan, was merely maintained rather than increased.
Despite the lowered guidance, Tenable did take some positive actions during the quarter, including repurchasing shares. Scotiabank acknowledged the appeal of Tenable’s offerings but decided to maintain a neutral stance, especially as the stock price dropped by 18% in after-hours trading. The analyst pointed out that within budget considerations for cybersecurity, exposure management might not be the highest priority or the most evident choice for platform standardization.
The report from Scotiabank reflects a cautious approach towards Tenable’s future performance, considering both the challenges and achievements the company has recently faced. The firm’s decision to maintain the Sector Perform rating indicates a wait-and-see attitude, as the market and Tenable’s strategic moves continue to unfold. InvestingPro data shows the company maintains a "GOOD" overall financial health score, with analysts expecting profitability this year despite current challenges. Subscribers can access 7 additional ProTips and detailed financial metrics to make more informed investment decisions.
In other recent news, Tenable Holdings Inc . reported its first-quarter 2025 financial results, surpassing Wall Street expectations. The cybersecurity company achieved earnings per share of $0.36, exceeding the forecasted $0.28, and reported revenue of $239.1 million, which was higher than the projected $233.73 million. Despite these strong earnings, Tenable’s stock experienced a decline in aftermarket trading. The company has also adjusted its full-year 2025 guidance, revising expectations for calculated current billings downward by $17.5 million and revenue by $5 million. Needham, a research firm, responded by lowering its price target for Tenable shares from $50.00 to $35.00, while maintaining a Buy rating, citing a strategic approach to mitigate potential risks. Tenable’s management expressed caution about growth due to uncertainties in the U.S. public sector. The company has also launched new AI and cloud security capabilities as part of its ongoing strategic initiatives.
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