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Tenable Holdings, Inc.'s (NASDAQ:TENB) Shift From Loss To Profit

We feel now is a pretty good time to analyse Tenable Holdings, Inc.'s (NASDAQ:TENB) business as it appears the company may be on the cusp of a considerable accomplishment. Tenable Holdings, Inc. provides cybersecurity solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The US$4.7b market-cap company announced a latest loss of US$43m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Tenable Holdings' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Tenable Holdings

Tenable Holdings is bordering on breakeven, according to the 11 American Software analysts. They expect the company to post a final loss in 2022, before turning a profit of US$866k in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 46% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Tenable Holdings given that this is a high-level summary, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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One thing we’d like to point out is that Tenable Holdings has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Tenable Holdings, so if you are interested in understanding the company at a deeper level, take a look at Tenable Holdings' company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

  1. Valuation: What is Tenable Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Tenable Holdings is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tenable Holdings’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.