Cybersecurity Stock Dazzles As Earnings More Than Double

It may be hard to stand out among the 34 companies in IBD’s cybersecurity industry group, where Palo Alto Networks (PANW), CrowdStrike (CRWD) and other companies boast huge sales volumes.


But Tenable (TENB) caught the attention of Wall Street Wednesday with an impressive fourth-quarter report. The company breezed past analysts’ expectations with earnings per share that more than doubled from the year-ago period.

Revenue rose 16% to $213.3 million. That’s about 11% of Palo Alto’s most recent quarterly sales and less than a third of CrowdStrike’s last quarterly revenue. Yet Tenable and those companies share some of the highest Composite Ratings in the industry group.

One of the bright spots in the fourth quarter was the addition of 597 “enterprise platform” customers and 156 net additions of six-figure contracts.

For the current quarter, management forecasts revenue of $212 million to $214.0 million, which would be an increase of 12% to 13%. It also expects earnings per share of 16 to 18 cents, for a gain of 45% to 63%.

Analysts Raise Price Targets On Cybersecurity Stock

Analysts at Truist, D.A. Davidson, Wells Fargo and other firms raised their price targets on the cybersecurity stock after the quarterly report.

In the world of hacking prevention, Tenable offers ways to manage, measure and compare cybersecurity risks. Its products highlight security issues such as vulnerabilities, regulatory compliance violations and other security issues.

The cybersecurity stock broke out past a 49.77 buy point of a cuplike base in heavy volume. The buy zone goes to 52.26. A dip that resembles a handle offered another entry at 48.51. Either way, the stock surged to the highest level since June 2022.

Shares have traded mainly between 33 and 57 for more than three years. That’s why the relative strength line is in a long-term downtrend. If the line can top its October 2023 peak, it would be a good sign for the stock.

IBD’s cybersecurity industry group ranks third of 197 groups, up more than 9% so far this year.

Palo Alto Networks is extended from a breakout in late November, but remains in buy range from a three-weeks-tight pattern that formed in January. CrowdStrike is trading at record highs and is well-extended from a run that began in September.


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