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On Monday, Stephens initiated coverage on Tenable Holdings Inc . (NASDAQ:TENB), a cybersecurity firm, assigning the stock an Equal Weight rating and establishing a price target of $42. Currently trading at $34.98, the stock sits within analyst targets ranging from $40 to $55. According to InvestingPro data, Tenable maintains impressive gross profit margins of 77.82%. The new rating is based on an enterprise value to revenue multiple of approximately 5 times the firm’s fiscal year 2026 revenue estimate.
Tenable is recognized by Stephens as a market leader in the Exposure Management (EM) field. The company’s strong position in Vulnerability Management (VM), its large customer base, and its comprehensive EM platform are seen as competitive advantages. While revenue growth remains positive at 12.68% over the last twelve months, the growth deceleration Tenable has experienced in recent years is attributed to secular challenges in traditional VM, heightened competition, and a lack of exposure to rapidly expanding attack surface areas.
The analyst believes that the key to Tenable’s success lies in accelerating its top-line growth. Several potential catalysts could drive this growth, primarily through increasing the proportion of its higher-growth EM business. The company’s stock performance in 2024 was negatively impacted by fundamental growth concerns and a bearish outlook on the EM space, which was influenced by worries over VM growth. For deeper insights into Tenable’s growth prospects and financial health, InvestingPro offers exclusive analysis and 8 additional ProTips.
Despite these challenges, Stephens notes that Tenable’s shares are currently trading at a discount—13.7% below the one-year average and 21.6% below the three-year average enterprise value to revenue multiple. Trading near its 52-week low, InvestingPro’s Fair Value analysis suggests the stock is currently undervalued. This discount suggests that there may be room for multiple expansion if Tenable can successfully accelerate its growth.
In other recent news, Tenable Holdings reported fourth-quarter earnings that exceeded expectations, with adjusted earnings per share of $0.41, surpassing the consensus estimate of $0.34. Revenue for the quarter reached $235.7 million, marking an 11% increase year-over-year and exceeding the projected $231.54 million. Despite these strong results, Tenable’s guidance for the first quarter and full year 2025 fell short of analyst expectations, with forecasted Q1 earnings per share of $0.28-$0.30 and revenue of $232-234 million. The full-year 2025 projections were also below estimates, with expected earnings per share of $1.52-$1.60 on revenue of $971-981 million.
JPMorgan recently raised its price target for Tenable to $53 from $50, maintaining an Overweight rating, citing the company’s robust free cash flow outlook and strong performance in large deals. The company’s Cyber Exposure platform, Tenable One, has been instrumental in securing competitive wins, particularly among Fortune 500 companies. Cantor Fitzgerald also initiated coverage with an Overweight rating and a $50 price target, noting Tenable’s financial efficiency and potential for margin expansion. The firm highlighted the company’s operating margin of 25.2% and its strategic growth in non-vulnerability management solutions, such as Cloud Security.
Tenable announced plans to acquire Vulcan Cyber Ltd. to bolster its exposure management platform. Despite the challenges in the core vulnerability management segment, these developments reflect Tenable’s ongoing efforts to expand its market presence and capabilities.
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