N-able (NABL): Assessing Valuation After Q3 Beat, Raised Guidance, and New Cybersecurity Launches

N-able (NABL) shares are making headlines after the company released its third-quarter results, which beat expectations and sparked renewed interest. Investors are eyeing the raised annual recurring revenue outlook as well as the roll-out of fresh cybersecurity solutions.

See our latest analysis for N-able.

Following the upbeat earnings and guidance update, N-able’s share price charged 9.4% higher in the past week, recouping some ground after a tough year that saw its 12-month total shareholder return fall nearly 29%. The latest jump signals fresh momentum as investors respond to stronger growth signals from its cybersecurity push and upward full-year revenue guidance. Lingering concerns from prior underperformance remain part of the broader story.

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But after this surge, and with analysts still projecting upside, is N-able’s recent momentum a sign the stock is undervalued? Or are investors already factoring in the company’s improved guidance and growth story?

Most Popular Narrative: 9.9% Undervalued

With the most popular narrative setting a fair value of $9.44 for N-able, nearly 10% above the last close of $8.50, the stock’s latest rally may still have room to run, according to consensus expectations. The narrative builds its calculation on forward profit gains and growing cybersecurity adoption, painting a picture of future upside even after recent momentum.

“Accelerating adoption of cloud technologies and the shift toward unified, integrated platforms has increased demand for N-able's end-to-end cyber resilience platform. This positions the company to capture a larger share of the expanding IT management and cybersecurity market and may drive sustained ARR and top-line revenue growth. Rising volume and sophistication of cyber threats is making security and backup a spending priority for SMBs and mid-market companies, supporting high customer retention rates (noted at ~90% renewals) and promising stable, growing recurring revenue streams and improved net margins.”

Read the complete narrative.

Want to know what’s driving that bullish price target? Analysts are betting on a revenue and margin transformation that outpaces broader software peers. Which key financial projections are at the heart of their case? See all the detailed math behind the valuation in the full narrative.

Result: Fair Value of $9.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, including potential industry consolidation and rapid technology shifts, which could hinder N-able’s growth despite recent optimism.

Find out about the key risks to this N-able narrative.

Another View: Looking Through the Sales Lens

Taking a broader look at value, N-able’s price-to-sales ratio stands at 3.2x, which is lower than the US Software industry average of 5.1x but slightly higher than its direct peers at 2.9x. Notably, it still trades below its fair ratio of 3.9x, indicating some potential value left on the table. This also warns that the gap with peers could spell risk if market sentiment shifts. Does this suggest a hidden bargain or lingering challenges? Let’s dig deeper.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own N-able Narrative

If you see things differently or want to test your own assumptions, you can build your perspective from scratch in just a few minutes. Do it your way

A great starting point for your N-able research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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