Scotiabank reduced its 12-month price target for N-Able Inc. (NYSE:NABL) to $5.25 from $8.75 on Thursday, while retaining a Sector Perform rating on the stock. At the time of the note the share price was trading at $4.74, hovering close to its 52-week low of $4.63 and reflecting a roughly 52% decline over the past year.
The analyst firm framed its decision around what it described as "respectable but unexciting" top-line growth and bottom-line results that were adequate but not compelling. Scotiabank said the company’s guidance for fiscal 2026 suggests there is limited scope for near-term upward revisions to consensus estimates.
Management has guided for a modest improvement in annual recurring revenue growth in 2026, but the outlook explicitly includes contributions from new products expected to appear in the second half of the year. Scotiabank questioned how much runway that leaves for true outperformance in the near term, given the timing of those product-driven revenue streams.
On the competitive front, Scotiabank argued that infrastructure and cybersecurity software such as N-Able’s should be relatively insulated from AI-coded competitors because customers regard these solutions as mission-critical. Nevertheless, the brokerage reported that neither fieldwork nor company results to date show signs that AI is acting as a material tailwind to N-Able’s business.
Scotiabank added that for N-Able shares to re-rate higher, the company would need to deliver top-line acceleration in 2026. The firm said it cannot confidently endorse that scenario at present, citing the fragmented nature of the software market in which N-Able operates and a lack of evident consolidation of customer spend toward any single vendor.
Recent financial results
In other company updates, N-Able reported fourth-quarter 2025 results showing revenue of $130 million, an increase of 12% year-over-year. The revenue figure was described as slightly above analyst expectations. However, earnings per share for the quarter came in at $0.06, below the $0.10 analysts had forecast, representing a 40% negative surprise on EPS.
Scotiabank’s note emphasized that while the revenue growth underscores solid performance and strategic initiatives at N-Able, the mixed print on profitability and the timing of product-driven contributions leave the broker cautious on the stock’s ability to re-rate absent clearer signs of accelerating top-line momentum.
Investor takeaway
Investors and analysts are watching the company’s 2026 guidance, the cadence of new-product revenue contributions, and whether AI dynamics evolve into a meaningful tailwind. In its assessment, Scotiabank is seeking evidence of sustained revenue acceleration before it would move to a more positive stance on the shares.