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Why Tenable (TENB) Shares Are Getting Obliterated Today

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

TENB Cover Image

What Happened?

Shares of cybersecurity software maker Tenable (NASDAQ: TENB) fell 6.4% in the afternoon session after the company reported fourth-quarter results that presented a mixed picture. Its outlook for the next quarter was less encouraging, as the company's revenue guidance for the upcoming quarter came in slightly below expectations, and its EPS forecast fell short of Wall Street's projections. On the other hand, Tenable's optimistic full-year EPS guidance significantly exceeded analysts' expectations, and its revenue outperformed Wall Street's estimates. Overall, this was a weaker quarter.

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What The Market Is Telling Us

Tenable’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 15.3% on the news that the company reported weak second quarter earnings results. Its full-year revenue guidance was below expectations, and its revenue guidance for next quarter missed Wall Street's estimates. In addition, blinning and free cash flow fell below expectations amidst what management considered "more challenging selling environment." Overall, this quarter could have been better and the outlook is weighing on the stock. 

Following the results, D.A. Davidson's analyst downgraded the stock's rating from Buy to Neutral and cut its price target from $56 to $40. The analyst added, "VM (vulnerability management) was an area of strength in Q1 in part due to increasing customer churn from some top VM competitors, and we expected that trend to play out again in Q2...With the exact opposite taking place, greenfield opportunities in VM seemingly drying up, and TENB talking about increased deal scrutiny & lengthening sales cycles in VM, we now believe VM growth could slow even further and become an increasing drag on overall growth despite increasingly favorable competitive dynamics in VM."

Tenable is up 3.9% since the beginning of the year, but at $40.48 per share, it is still trading 22% below its 52-week high of $51.89 from February 2024. Investors who bought $1,000 worth of Tenable’s shares 5 years ago would now be looking at an investment worth $1,447.

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