Tenable's Biggest Takeaway Is Doubling Its Unlevered FCF, Analyst Says

Needham analyst Mike Cikos maintained Tenable Holdings, Inc TENB with a Buy and lowered the price target from $52 to $44.
He believed the biggest takeaway for investors from TENB's 3Q22 earnings is management's expectation of doubling unlevered free cash flow (uFCF) in the next two years.
Assuming Revenue growth of 20% from CY22 to CY24 (conservative versus management's previously communicated 20%-plus CAGR), Tenable's uFCF Margin will likely grow from 18% at the midpoint in CY22 to ~25% in CY24.
His back-of-the-envelope math suggests Tenable's targeted $240 Million in CY24 is roughly $1.90 per share in uFCF, or an 18x multiple given today's stock price.
Additionally, management sounded more bullish on its opportunity in the current environment, a departure from its 2Q messaging.
He believes this reflects the more robust print and stable sales cycles.
He expects TENB's shares to react positively to the print and muted expectations.
Piper Sandler analyst Rob Owens maintained Tenable Holdings with an Overweight and lowered the price target from $65 to $55.
Morgan Stanley analyst Hamza Fodderwala maintained Tenable Holdings with an Overweight and raised the price target from $44 to $47.
Wedbush analyst Daniel Ives maintained Tenable Holdings with an Outperform and lowered the price target from $57 to $48.
Price Action: TENB shares traded higher by 14.7% at $39.26 on the last check Wednesday.

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