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middle cover Collectibles Collectibles (NASDAQ: TENB) It is up 4.5% since reporting better-than-expected third-quarter results in late October.
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The Maryland-based company provides cybersecurity solutions to enterprise clients internationally. It serves clients in a number of sectors, including automotive, building management, energy, finance, healthcare, medical manufacturing, oil and gas, retail, transportation, water, and government agencies.
The company’s focus is on a relatively new label for cyber security, cyber exposure. The company’s products measure risk across various IT assets, such as networks, desktop computers, and on-site client servers.
The company went public in July 2018, so it is within the time window that new public companies often make significant price gains. It happens because these young companies have a much needed product or service (cyber security is a prime example) and smart and eager management teams to drive growth.
Tenable earned $0.07 per share last quarter, down 22% from a year ago, but still ahead of analysts’ opinions, which called for earnings of $0.02 per share, according to MarketBeat data.
Double-digit revenue growth
Revenue was $138.66 million, surpassing views of $134.61 million. This represents an annual growth of 23%. Revenue growth has accelerated in the past two quarters of 20%. Over the past eight quarters, Tenable has grown its revenue at rates from 20% to 29%.
For the full year, Wall Street pegged earnings at $0.31 per share, which is a 63% increase from 2020. This number was revised higher recently. The company has become profitable in 2020, after several years of losses, which is quite common and often to be expected with a new technology company. Growth in younger companies like Tenable is often the focus for several years, rather than profitability.
The company has surpassed earnings and revenue views in every quarter for the past three years.
MarketBeat analysts’ ratings show the consensus estimate for Tenable to be “buy,” with a price target of $62.92, which is a 16.37% increase.
Let’s dive into these numbers, starting with the stock price action. Tenable has been forming a teacup base since January 19, when it peaked at $58.45. This seems like a long time, but the rules often form over the course of a year.
He is currently adding a handle to this mug, which offers a lower purchase point, above $56.84. While it may seem counterintuitive that a pullback can be an encouraging sign, the handle is often an area where institutional investors take some profits after the stock rose from a previous low.
Drill the right side of the base
In this case, Tenable began digging the right side of its base in early May, although it was a choppy ride. However, investors who have bought at the bottom, or near that point, are often willing to take some profits once the stock has risen somewhat. You can see this phenomenon in the handle.
With the stock coming off its base, it is up 26.04% in the past three months. It is up only 3.27% year-to-date, and is up 55.62% in the last year.
In this context, an agreed price target does not seem out of the question.
However, don’t be surprised if it takes Tenable a minute to reach this goal. As we’ve seen, this stock was a slow, steady climb, with plenty of little dips along the way.
A surprisingly good earnings report is often the catalyst for a big price hike, but that hasn’t been the case lately for Tenable. The stock has fallen or risen slowly after the quarterly reports this year.
Since the earnings report, six analysts have boosted their price targets for the stock.
So is Tenable Buy Now? For starters, wait to see if it can break that high of $56.84, ideally in heavy volume. If that happens, and if the stock continues to the upside without dropping 6% or more below this buy point, that stock could be on its way to hitting that price target.