Last Update 24 Jan 26

Fair value Decreased 2.17%

TENB: Billing Transition Volatility Will Set Up Upside And Sponsor Interest

Analysts have reduced their fair value estimate for Tenable Holdings to about US$35.63 from roughly US$36.42, reflecting lower price targets on the stock as they take into account billing mix shifts and recent model updates across the Street.

Analyst Commentary

Recent Street research on Tenable reflects a mix of optimism about the long term potential and concern around near term execution and valuation, especially as the company adjusts its billing practices.

Bullish Takeaways

Bullish analysts point to interest from potential strategic or financial sponsors as a sign that Tenable's security assets could be attractive at current valuation levels, especially relative to peers in the sector.
Some see Tenable's broader security capabilities, including Tenable One, as an asset that could appeal to larger platforms looking to expand their offerings, which influences how they frame upside scenarios in their models.
Despite trimming price targets, JPMorgan keeps an Overweight rating and updates its model around earnings, which suggests they still see room for execution to support their longer term view.
Ongoing Street interest, even with lower targets, indicates that analysts are continuing to follow the name closely rather than stepping away entirely, which can support liquidity and coverage quality for investors.

Bearish Takeaways

Bearish analysts are focused on the shift from multi year to annual upfront billings that began in 1Q25, as this change is creating a wider gap between cRPO and CCB growth and adds complexity to tracking underlying trends.
Several firms have cut price targets, including reductions to US$28 and US$40, reflecting more conservative assumptions around execution, revenue visibility and the impact of billing mix changes on near term reported metrics.
There is concern that the billing transition may drive near term volatility in reported growth metrics, which could make it harder for investors to assess momentum until management provides clearer medium term targets or more detailed Tenable One disclosures.
Lowered targets highlight that some on the Street are reassessing what they are willing to pay for Tenable in the short run while the company works through model updates and the billing reset.

What's in the News

Tenable signed a OneGov agreement with the U.S. General Services Administration to provide its FedRAMP authorized Tenable Cloud Security solution to U.S. federal agencies, including the Department of Defense, at a discount through March 31, 2027. The agreement supports multi cloud visibility, Zero Trust initiatives and continuous compliance for government workloads (Key Developments).
The company highlighted that Tenable Cloud Security is positioned as a comprehensive CNAPP platform. It is aimed at helping federal agencies protect mission critical cloud environments, manage identity risk and least privilege, and extend protection to AI resources across multi cloud environments (Key Developments).
Tenable issued consolidated earnings guidance for the fourth quarter of 2025, with expected revenue of US$249.1 million to US$253.1 million, income from operations of US$4.0 million to US$8.0 million, a net loss of US$6.0 million to US$2.0 million and diluted net loss per share of US$0.05 to US$0.02 (Key Developments).
For full year 2025, the company guided to revenue of US$988.0 million to US$992.0 million, loss from operations of US$13.9 million to US$9.9 million, a net loss of US$41.3 million to US$37.3 million and diluted net loss per share of US$0.34 to US$0.31 (Key Developments).
Between July 1, 2025 and September 30, 2025, Tenable repurchased 1,989,000 shares for US$59.97 million, and in total has repurchased 8,274,013 shares for US$299.91 million under the buyback program announced on November 27, 2023, representing 6.91% of shares (Key Developments).

Valuation Changes

Fair Value: reduced slightly from about US$36.42 to about US$35.63 per share.
Discount Rate: adjusted marginally from about 8.85% to about 8.85%, reflecting a very small change in the risk input used.
Revenue Growth: tweaked from about 8.48% to about 8.47%, indicating a very small change in the growth assumption.
Net Profit Margin: inched up from about 3.71% to about 3.71%, a negligible change in projected profitability.
Future P/E: trimmed from about 117.9x to about 115.4x, indicating a slightly lower valuation multiple embedded in the model.

Demand for Tenable's unified risk management solutions is rising due to digital transformation, regulatory pressures, and the need for holistic risk visibility across IT and cloud environments.
AI-driven innovation, strategic acquisitions, and expanding global reach are fueling larger deals, stronger margins, and sustained customer and revenue growth.
Reliance on government contracts, intensifying competition, rising expenses, and innovation risks threaten Tenable's revenue growth, margins, and market position.

Catalysts

About Tenable Holdings

Provides cyber exposure management solutions in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan.What are the underlying business or industry changes driving this perspective?

The accelerating shift towards digital transformation and cloud adoption is expanding organizations' attack surfaces, driving sustained demand for Tenable's unified exposure management platform-this is expected to grow total addressable market and provide strong long-term revenue tailwinds.
Heightened regulatory scrutiny, such as evolving data privacy and cybersecurity compliance standards, is forcing enterprises (including smaller organizations) to prioritize vulnerability management and unified risk platforms-supporting higher renewal rates, longer contract durations, and increased recurring revenue visibility.
The convergence of IT, cloud, and OT environments requires organizations to obtain holistic risk visibility; Tenable's ability to consolidate multiple asset types (VM, cloud, identity, OT, AI security) in a single platform is resulting in larger deal sizes and growing enterprise adoption, directly impacting top-line growth and average selling prices.
Continuing investments in AI-driven analytics, automation, and proprietary vulnerability research have resulted in differentiated product capabilities and analyst endorsements, strengthening Tenable's pricing power and reinforcing gross margin expansion over time.
Strategic acquisitions (such as Apex for AI security), deeper go-to-market channel enablement, and increased international pipeline have produced robust net new customer growth, multi-year commitments, and a growing backlog (RPO), supporting visibility and long-term earnings scalability.

Tenable Holdings Earnings and Revenue Growth

Tenable Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Tenable Holdings's revenue will grow by 8.8% annually over the next 3 years.
Analysts assume that profit margins will increase from -4.7% today to 2.8% in 3 years time.
Analysts expect earnings to reach $33.8 million (and earnings per share of $0.44) by about September 2028, up from $-45.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $66.8 million in earnings, and the most bearish expecting $-55.4 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 188.6x on those 2028 earnings, up from -82.8x today. This future PE is greater than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 0.8% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.74%, as per the Simply Wall St company report.

Tenable Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Tenable's heavy reliance on growth in U.S. Federal and public sector contracts exposes it to earnings volatility, especially as deal cycles lengthen and scrutiny and reviews increase, which may negatively impact net revenue and expansion rates if spending slows or contracts are lost.
The shift towards bundled, platform-centric cybersecurity offerings by large, well-capitalized competitors-especially hyperscalers and established cybersecurity vendors-raises the risk of margin compression and market share loss as standalone vulnerability management becomes increasingly commoditized, thereby pressuring long-term revenue growth and operating margins.
Tenable's strategy involves a rising proportion of long-term, multi-year customer commitments and platform consolidation, but if the renewal base weakens or customer expansion slows amid budget constraints or increased competition, it may limit net dollar expansion rates, impede topline growth, and increase reliance on new logo generation.
Continued investments in AI, new product integrations, and recent acquisitions (such as Apex and Vulcan) are driving R&D and operating expenses higher; if monetization of these innovations lags, the result may be flat or declining gross margins and lower net earnings despite revenue growth.
As the cybersecurity market rapidly adopts AI-driven security and automation, there's the risk that Tenable's innovation pace could lag that of competitors or that next-generation embedded security features from cloud providers will reduce demand for specialized solutions, potentially shrinking the addressable market and impacting long-term revenue and margin sustainability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $39.95 for Tenable Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $45.0, and the most bearish reporting a price target of just $32.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.2 billion, earnings will come to $33.8 million, and it would be trading on a PE ratio of 188.6x, assuming you use a discount rate of 8.7%.
Given the current share price of $30.75, the analyst price target of $39.95 is 23.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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