Can Tenable’s 25% Stock Drop Signal a Mispricing Opportunity in 2025?

• Wondering if Tenable Holdings could be a hidden bargain or a value trap? You are not alone, and there's a lot to unpack when it comes to figuring out what the stock is truly worth.
• After a tough year, the stock is down 25.0% over the last twelve months, and it's slipped 1.9% in the past month, signaling shifting sentiment among investors.
• Much of the recent price movement has tracked with broader cybersecurity sector trends and ongoing concerns around tech valuations. News surrounding increased cyber threats and industry shakeups has kept Tenable Holdings in the conversation, adding both excitement and uncertainty to its outlook.
• Digging into the fundamentals, Tenable earns a valuation score of 6 out of 6 on Simply Wall St. This suggests it is undervalued on every single check. Next, we will break down how those checks actually work, but stick with us to find out why a deeper perspective on value could be even more important than any score alone.

Find out why Tenable Holdings's -25.0% return over the last year is lagging behind its peers.

Approach 1: Tenable Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and then discounting those estimates back to their present value. This approach helps investors determine what a business is fundamentally worth today, based on its anticipated ability to generate cash in the future.

For Tenable Holdings, the most recent Free Cash Flow reported was approximately $250 million. Analysts project continued growth, with Free Cash Flow expected to reach around $323 million by the end of 2027. Simple Wall St extends these forecasts further and estimates Free Cash Flow could rise to about $489 million by 2035. These projections form the backbone of the DCF and provide a long-term perspective on the company’s earning power in dollars.

The DCF model indicates that Tenable Holdings has an estimated intrinsic value of $52.66 per share. Compared to the stock’s current price, this suggests the shares are trading at a notable 44.9% discount to their fair value and signals significant undervaluation in the market at this time.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Tenable Holdings is undervalued by 44.9%. Track this in your watchlist or portfolio, or discover 840 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Tenable Holdings.

Approach 2: Tenable Holdings Price vs Sales

For technology companies like Tenable Holdings, the Price-to-Sales (P/S) ratio is a popular way to gauge value, especially when companies are investing heavily in growth and may not be consistently profitable. The P/S ratio reveals what investors are willing to pay for each dollar of revenue and provides insight into how the market values a company's growth prospects and sales momentum.

Growth expectations and risk play a big role in where a "normal" or "fair" P/S ratio should land. Rapidly expanding companies with higher projected sales often command loftier P/S multiples, while riskier or slower-growing firms typically trade at lower ones. When evaluating Tenable Holdings, its current P/S ratio stands at 3.57x. For context, the industry average is 5.33x, and the average for comparable peers is even higher at 5.99x.

Simply Wall St's proprietary Fair Ratio for Tenable Holdings is 4.28x. This metric takes into account far more than peer or industry comparisons alone, by factoring in Tenable’s expected revenue growth, profit margins, risk profile, industry dynamics, and market capitalization. The Fair Ratio delivers a more tailored view of value in light of the company’s unique situation.

In comparing Tenable Holdings’ actual P/S ratio of 3.57x to its Fair Ratio of 4.28x, the stock trades at a meaningful discount relative to its fundamentals, suggesting that the market may be underestimating Tenable’s real value.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1411 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Tenable Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a big-picture story investors build around a company, connecting their personal view of its future, such as projected revenue, earnings, and profit margins, to a financial forecast and, ultimately, to a fair value.

Unlike static ratios or scores, Narratives give investors an accessible way to define what they believe the company is capable of and then quickly see what that means numerically. On Simply Wall St's Community page, millions of investors use Narratives to compare their own assumptions and fair value estimates with the latest market price so they can confidently decide whether to hold, buy, or sell.

The power of Narratives lies in how they reflect new developments. Every time there is fresh news or updated company results, Narratives adjust automatically, ensuring your decisions are always rooted in the latest data and outlooks. For example, some investors see Tenable Holdings’ potential and assign a higher fair value when bullish on AI-driven cybersecurity demand, while more cautious investors price in rising expenses and stiff competition, landing on a lower fair value. Each Narrative tells a different story using the same platform and tools.

Do you think there's more to the story for Tenable Holdings? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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