At US$38.41, Is It Time To Put Tenable Holdings, Inc. (NASDAQ:TENB) On Your Watch List?
Tenable Holdings, Inc. (NASDAQ:TENB), might not be a large cap stock, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Tenable Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Tenable Holdings
What's the opportunity in Tenable Holdings?
According to my valuation model, Tenable Holdings seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Tenable Holdings today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $45.03, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Tenable Holdings’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Tenable Holdings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Tenable Holdings' earnings over the next few years are expected to increase by 43%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? TENB’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on TENB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So while earnings quality is important, it's equally important to consider the risks facing Tenable Holdings at this point in time. In terms of investment risks, we've identified 2 warning signs with Tenable Holdings, and understanding them should be part of your investment process.
If you are no longer interested in Tenable Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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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