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Investing.com -- JP Morgan upgraded SailPoint Technologies to Overweight from Neutral, saying the identity security provider is well placed to win market share as demand for protecting digital identities grows.
“An opportunity to own a best-of-breed leader at sub-IPO valuation levels,” says JPM analysts.
The brokerage said the stock’s recent weakness ahead of an IPO lockup expiry offers investors a chance to buy at a discount to other high-growth cybersecurity firms.
It expects SailPoint to benefit from legacy vendors’ slow response to rising identity-related risks, while its stronger cloud platform, partner network and customer base position it for expansion.
JP Morgan forecasts SailPoint will surpass $1 billion in annual recurring revenue within the next few quarters, with growth above 25% and improving profit margins.
SailPoint has developed its cloud platform to the point where conversion is attractive for customers still on premise, according to JPM
It also pointed to rising demand from “machine” and AI-driven identities, which broaden attack surfaces and require more sophisticated security controls.
The bank said SailPoint could see further upside if it converts more of its $150 million in on-premise maintenance revenue to cloud subscriptions, potentially adding several percentage points to annual growth.
“SailPoint is one of the best positioned ‘best-of-breed’ Identity platforms to benefit from share consolidation with a strong technical moat, solid execution, and exposure to high growth emerging demand,” analysts said.