DA Davidson has lowered its price target on Tenable Holdings Inc. to $24.00 from $25.00 and continues to carry a Neutral recommendation on the cybersecurity software vendor's shares. The adjustment comes as the stock trades around its 52-week low of $19.15 after falling more than 50% over the past year.
Market momentum indicators have shown signs of extreme weakness: according to InvestingPro, Tenable’s relative strength index (RSI) suggests the shares may be in oversold territory. The analyst move follows the company’s fourth-quarter report, which DA Davidson characterized as "solid," and initial guidance for fiscal 2026 that modestly topped consensus expectations for revenue, operating profit and earnings per share.
Despite those positives, the firm noted several elements that restrained its outlook. Tenable’s unlevered free cash flow (uFCF) guidance came in slightly under consensus at the midpoint. Company management explained that the shortfall is tied to a reduction in multi-year billing practices - a change that weighs on near-term cash receipts even as revenue recognition may remain steady.
DA Davidson also pointed to a shift in Tenable’s disclosure practices. Management indicated it will no longer provide guidance on cloud computing billings (CCB). The firm said the change reflects shorter average billing durations that are damping CCB growth and creating a divergence between CCB metrics and overall revenue trends. That disconnect, the analyst said, makes it harder to use CCB as a reliable signal of underlying billings momentum.
Underlying fundamentals retain some strength. InvestingPro data show Tenable posting gross profit margins of 78.09%, and analysts expect the company to achieve profitability this fiscal year. The firm’s quarter beat expectations on several fronts: Tenable reported fourth-quarter revenue of $260.5 million, topping forecasts by 3.5%, and delivered a 14.29% earnings-per-share surprise.
DA Davidson noted there are "some growing signs of growth stabilization" at the company, but said it requires further confirmation before adopting a more positive stance. For now, the modest reduction in the price target accompanies the unchanged Neutral rating.
Other sell-side responses to the quarter skewed more bullish. Cantor Fitzgerald reaffirmed an Overweight rating and kept a $30.00 price target after the results. Truist Securities also reiterated a Buy rating with a $27.00 target, citing that Tenable exceeded the high end of guidance across revenue and operating margin metrics.
Both Cantor Fitzgerald and Truist highlighted the company’s outperformance versus FactSet consensus on revenue, billings, operating margin and free cash flow. Even with the beat and positive analyst commentary, the stock dipped slightly in after-hours trading following the release, while both firms maintained an optimistic view on Tenable’s trajectory.
Context for investors - The picture for Tenable combines robust gross margins and a clear move toward profitability with operational transitions in billing practices and the discontinuation of CCB guidance that complicate cash-flow comparability. Analysts appear split between acknowledging near-term stabilization and awaiting clearer confirmation of sustainable growth.