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Last Update: 20-Aug-18 09:30 ET
Most Analysts Have Bullish Outlook for Recent Cyber-Security IPO Tenable (TENB)
Since going public,
it's been a wild ride for cyber security company Tenable (TENB 32.00, +0.67, +2.14%). Its IPO made
quite a splash on July 26 as its up-sized deal priced above expectations ($23
vs. $20-$22) and opened for trade with a whopping 43% gain. After the red-hot start,
the stock cooled off as traders locked in the sizable opening gains. Then, in
early August, shares sky-rocketed to new highs, gaining nearly 20% in one
week's time. Once again, profit-taking reared its head and TENB has erased most
of those gains over the past several sessions.
Today, the stock is back in the news as its quiet period expires, allowing investment firms involved with the IPO to publish research and estimates for the first time. As we discuss in more detail below, sentiment is skewing towards the bullish side, which has shares moving higher in early morning trading.
Overview
The cyber-security company specifically focuses on "Cyber Exposure", which involves managing and measuring risk. As of December 31, 2017, the company served over 24,000 customers, up 14% from 2016. TENB has a diversified customer base and clients in 160 countries, including 53% of the Fortune 500 and 29% of the Global 2,000.
Looking back, in 1998, one of its co-founders created "Nessus", one of the most widely used vulnerability assessment platforms in the cyber-security industry. The free version of Nessus has had about 2 million downloads since its inception. This has created a pool of potential customers, who are already familiar with its platform, for TENB to funnel to its current products.
Today, its core product is Tenable.io, software that assesses risk exposure across various IT assets like networking infrastructure, desktops, mobile phones, servers, containers, and Internet of Things.
In addition to identifying risk and vulnerabilities, Tenable.io helps organizations to eliminate blind spots across their IT systems and it translates vulnerability data into business metrics and insights that executives can use to make decisions. Furthermore, Tenable.io is able to provide visibility into internal and regulatory compliance violations.
Put another way, its platform is built to be a "Cyber Exposure Command Center" which enables IT managers and executives to answer a few fundamental key questions, like: 1). Where are we exposed? 2). Where should we prioritize based on risk? 3). Are we reducing exposure? 4). How do we compare to our peers?
Quiet Period Expiration
Now, circling back to today's news, there have been several initiations to hit the wires, and most of them landed on the bullish side. Stifel appears to be the most bullish, assigning a Buy and $43 price target, which is 36% higher than current prices. In its research note, Stifel stated that its investment thesis is based on the belief that Tenable is evolving into a sophisticated analytics platform that can better help enterprises manage their broader cyber risk.
Also notable on the bullish side is a Buy at Deutsche Bank with a $40 price target, and a buy at BTIG Research, price target of $41.
The initiation that particularly stands out from the cautious side is Morgan Stanley's Equal Weight and price target of $31, which is actually slightly below current prices. With the strong pricing and substantial opening gains, TENB has become an expensive stock with a trailing P/S of about 15x. So, it is very likely that valuation played a major role in the more cautious initiation at Morgan Stanley.
All in all, though, sentiment on the Street is optimistic about TENB's growth prospects.
Today, the stock is back in the news as its quiet period expires, allowing investment firms involved with the IPO to publish research and estimates for the first time. As we discuss in more detail below, sentiment is skewing towards the bullish side, which has shares moving higher in early morning trading.
Overview
The cyber-security company specifically focuses on "Cyber Exposure", which involves managing and measuring risk. As of December 31, 2017, the company served over 24,000 customers, up 14% from 2016. TENB has a diversified customer base and clients in 160 countries, including 53% of the Fortune 500 and 29% of the Global 2,000.
Looking back, in 1998, one of its co-founders created "Nessus", one of the most widely used vulnerability assessment platforms in the cyber-security industry. The free version of Nessus has had about 2 million downloads since its inception. This has created a pool of potential customers, who are already familiar with its platform, for TENB to funnel to its current products.
Today, its core product is Tenable.io, software that assesses risk exposure across various IT assets like networking infrastructure, desktops, mobile phones, servers, containers, and Internet of Things.
In addition to identifying risk and vulnerabilities, Tenable.io helps organizations to eliminate blind spots across their IT systems and it translates vulnerability data into business metrics and insights that executives can use to make decisions. Furthermore, Tenable.io is able to provide visibility into internal and regulatory compliance violations.
Put another way, its platform is built to be a "Cyber Exposure Command Center" which enables IT managers and executives to answer a few fundamental key questions, like: 1). Where are we exposed? 2). Where should we prioritize based on risk? 3). Are we reducing exposure? 4). How do we compare to our peers?
Quiet Period Expiration
Now, circling back to today's news, there have been several initiations to hit the wires, and most of them landed on the bullish side. Stifel appears to be the most bullish, assigning a Buy and $43 price target, which is 36% higher than current prices. In its research note, Stifel stated that its investment thesis is based on the belief that Tenable is evolving into a sophisticated analytics platform that can better help enterprises manage their broader cyber risk.
Also notable on the bullish side is a Buy at Deutsche Bank with a $40 price target, and a buy at BTIG Research, price target of $41.
The initiation that particularly stands out from the cautious side is Morgan Stanley's Equal Weight and price target of $31, which is actually slightly below current prices. With the strong pricing and substantial opening gains, TENB has become an expensive stock with a trailing P/S of about 15x. So, it is very likely that valuation played a major role in the more cautious initiation at Morgan Stanley.
All in all, though, sentiment on the Street is optimistic about TENB's growth prospects.
