Cybersecurity company Tenable Holdings Inc. (NASDAQ: TENB) shares surged to a 52-week high on solid Q4 2023 earnings performance. The computer and technology sector company specializes in cyber exposure management. It helps businesses reduce their cyber risks with its Tenable One Exposure Management Platform that includes vulnerability management, and container and cloud security solutions. The cybersecurity leader faces stiff competition from CyberArk Software Ltd. (NASDAQ: CYBR) and Qualys Inc. (NASDAQ: QLYS).
Tenable's services enable organizations to identify potential vulnerabilities even the ones outside the conventional network perimeter. It provides Predictive Storing, which utilizes artificial intelligence (AI) to visualize potential attack paths within the network and prioritize the most critical issues. Exposure AI solutions utilize generative AI to summarize findings and recommend actions to mitigate threats.
Tenable's cyber exposure solutions
While the term may be unfamiliar, the services are self-explanatory. Tenable offers a suite of services to help organizations with their vulnerability management. The flagship product Nessus is a real-time solution that utilizes sophisticated machine learning algorithms to actively scan to identify vulnerabilities in a company's cybersecurity infrastructure, IT systems, devices and networks. Tenable provides solutions to secure cloud environments, including identity security, workload protection, compliance management, and visibility into cloud assets. Check out the sector heatmap on MarketBeat.
Solid fourth-quarter 2023 performance
On February 6, 2023, Tenable reported Q4 2023 non-GAAP diluted EPS of 25 cents, beating 14 cents consensus analyst estimates by 11 cents. GAAP net loss was $21.6 million. Non-GAAP income was $30.2 million. Revenues climbed 16% YoY to $213.3 million, beating analyst estimates of $206.45 million. Q4 calculated billing rose 14% YoY to $371.6 million, and full-year calculated billings rose 18% YoY to $873.3 million. Tenable gained 597 new enterprise platform clients and 156 net new six-figure customers in the quarter. Get AI-powered insights on MarketBeat.
Raised EPS guidance for 2024
Tenable expects Q1 2024 EPS of 16 cents to 18 cents versus 15 cents consensus analyst estimates. Revenues are expected between $212 million to $214 million versus $214.26 million analyst estimates. Full-year 2024 EPS is expected between $1.03 to $1.10 versus 80 cents consensus analyst estimates. Revenues are expected to be between $895 million and $905 million. Unlevered cash flow is expected in the range of $220 million to $230 million.
Growing operating margins and larger clients
Tenable Holdings CEO Amit Yoran stated full-year operating margin rose 500 bps YoY to 15%. The company added 156 new six-figure clients in its fourth quarter, which was also a "great quarter for seven-figure customers." Yoran commented, "The takeaway here is that we're increasingly landing larger customers and helping our customers secure additional asset types across their attack surface. This is a testament to the importance of exposure management, our market-leading products, and the vendor consolidation we can deliver to our customers.”
Broadened offerings driving new business
Yoran pointed out that 50% of new business was driven by Tenable One, cloud and identity and operational technology (OT) environment solutions. This is also a testament to Tenable successfully broadening its offerings through organic investments and cybersecurity acquisitions. The evolution has enabled Tenable to land clients beyond vulnerability management, including cloud, identity, and OT.
Boosting efficiency and agility
These best-in-class individual products are now core to its offerings and selling motions. “This evolution has now put us in a position to begin optimizing our go-to-market efforts, including reducing our reliance on sales specialists, overlay teams, and streamlining layers of management. “ Yoran underscored how its go-to-market strategy has enabled the company to reduce its workforce by 5%.
Tenable Holdings analyst ratings and price targets are at MarketBeat. Tenable’s peers and competitor stocks can be found with the MarketBeat stock screener.
Daily symmetrical triangle breakout
The daily candlestick chart on TENB illustrates a symmetrical triangle breakout pattern. TENB shares fell to a swing low of $42.62 at the daily 200-period moving average (MA) support on Jan. 5, 2024. It triggered a daily market structure low (MSL) breakout through the $44.08 trigger, forming a daily flagpole rising to a peak of $48.45 as the symmetrical triangle formed. This pattern is comprised of a descending upper trendline comprised of lower highs and an ascending lower trendline comprised of higher lows as they meet at an apex point. The breakout occurred on a strong earnings report-driven price gap peaking at $53.50 on Feb. 7, 2024. The gap fill levels formed at $48.96 and $47.79. The daily relative strength index (RSI) surged through the overbought 70-band, which warrants the patient not to chase. Pullback support levels are at $47.79, $45.97, $44.08 and $42.62.
