Tenable Holdings Can Gain From Attractive Growth Setup & Accelerating FCF: Analyst

Stephens analyst Brian Colley initiated coverage on Tenable Holdings Inc TENB with Outperform rating and a price target of $60.

The analyst thinks TENB's best-of-breed strategy helps it differentiate its business, focusing on leveraging its VM leadership to create a broader Exposure Management platform covering the entire modern attack surface.

The analyst expects TENB to see continued share gains and growth opportunities on rising Tenable One adoption, asset coverage growth, OT security, cloud, and identity.

Colley sees attractive re-acceleration in topline growth above consensus expectations and solid valuation support given management's commitment to 2024 underlying FCF of $240 million-$250 million.

The analyst believes TENB can generate sales growth of over 15% - 20% and underlying FCF margins of 25% - 30% in the coming years.

Colley estimates adjusted EPS of $0.85 on $901.2 million revenues in FY24 and $1.09 on $1.04 billion revenues in FY25.

Last month, TENB reported better-than-expected Q2 FY23 results, with revenues of $195.04 million beating estimates of $190.19 million and EPS of $0.22 beating the estimate of $0.13. 

Price Action: TENB shares are trading higher by 0.66% at $44.51 on the last check Friday.