While shareholders of Tenable Holdings (NASDAQ:TENB) are in the black over 3 years, those who bought a week ago aren't so fortunate

By
Simply Wall St
Published
November 24, 2021
NasdaqGS:TENB
Source: Shutterstock

You can receive the average market return by buying a low-cost index fund. But if you pick the right individual stocks, you could make more than that. To wit, Tenable Holdings, Inc. (NASDAQ:TENB) shares are up 87% in three years, besting the market return. Also positive was the solid 47% share price increase over the last twelve months.

While the stock has fallen 6.5% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Tenable Holdings

Given that Tenable Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last three years Tenable Holdings has grown its revenue at 23% annually. That's well above most pre-profit companies. The share price rise of 23% per year throughout that time is nice to see, and given the revenue growth, that gain seems somewhat justified. So now might be the perfect time to put Tenable Holdings on your radar. If the company is trending towards profitability then it could be very interesting.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
NasdaqGS:TENB Earnings and Revenue Growth November 24th 2021

Tenable Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Tenable Holdings in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Tenable Holdings shareholders have gained 47% (in total) over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 23%. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Tenable Holdings that you should be aware of before investing here.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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