SailPoint earns Outperform at Wolfe on mid-market push, AI identity upside

Investing.com -- Wolfe Research initiated coverage on SailPoint with an Outperform rating and a $27 price target, arguing the identity governance specialist is positioned to deliver sustained high-growth as it shifts further into a Software-as-a-Service (SaaS) model.

The brokerage bases its target on roughly 12 times expected 2026 enterprise value-to-sales (EV/S) and notes that the stock currently trades at about a 15% discount to heavyweight growth peers.

Analyst Joshua Tilton said SailPoint’s decision to focus strictly on governance rather than follow rivals into adjacent identity segments has created discipline rather than strategic limitation.

He flags the company’s transition from an on-prem enterprise-focused business to a cloud-based model as a key catalyst.

“We believe this unlocks a meaningful mid-market opportunity” in a total addressable market (TAM) estimated at $55 billion, Tilton wrote. 

He points to survey work showing Identity Governance and Administration ranked as the top priority within identity security budgets, with SailPoint recording the largest year-on-year improvement in spending intentions across 18 security vendors.

Customer commentary at the company’s user conference also signals solid demand, with 67% of respondents expecting to increase spend over the next year.

The analyst says SailPoint is well placed to benefit from the rise of AI and autonomous agents, arguing that governance rather than access provisioning will be the most critical layer of identity security in that environment.

“We see SailPoint as best positioned to deliver on the most challenging component (governance, not access) by ensuring that agents only access the appropriate applications at machine speed,” he said.

Wolfe’s upside model calls for annual recurring revenue (ARR) growth of around 30% in 2026, well ahead of guidance, with durable mid-to-high 20% growth beyond that.

While private equity owner Thoma Bravo still controls roughly 86% of the float, Wolfe sees any selling as an opportunity.

“If they’re selling, we’re buying!” Wolfe’s note states.

Key risks cited include increased competition in identity governance, slower-than-expected SaaS migrations, and the possibility that Thoma Bravo’s holding caps near-term stock performance.

Upcoming third-quarter 2026 earnings and a potential secondary offering are seen as catalysts that could improve liquidity and sentiment.