Tenable Holdings, Inc. (NASDAQ: TENB)

Sector: Technology Industry: Software - Infrastructure CIK: 0001660280
Market Cap 2.79 Bn
P/B 8.09
P/E -83.11
P/S 2.86
ROIC (Qtr) -0.53
Div Yield % 0.00
Rev 1y % (Qtr) 11.16
Total Debt (Qtr) 415.20 Mn
Debt/Equity (Qtr) 1.21

About

Tenable Holdings, Inc. (TENB) is a prominent player in the cybersecurity industry, specializing in exposure management solutions. The company's primary business activities revolve around providing organizations with tools to measure, compare, and reduce their cybersecurity risk. Tenable's operations span across various countries, serving a diverse range of industries including manufacturing, energy, technology, finance, healthcare, and retail. Tenable generates revenue through a variety of products and services. Its primary offerings include Tenable...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 264.84M provides robust 0.64x coverage of total debt 415.20M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 171.85M provide 20.64x coverage of short-term debt 8.33M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 247.55M exceeds capital expenditure of 17.29M by 14.32x, indicating strong organic growth funding capability.
  • Free cash flow of 247.55M provides exceptional 8.55x coverage of interest expense 28.95M, showing strong debt service ability.
  • Robust R&D investment of 213.45M at 0.39x of SG&A 551.11M demonstrates strong commitment to innovation and future growth.

Bear case

  • Operating cash flow of 264.84M barely covers its investment activities of (184.62M), with a coverage ratio of -1.43, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (184.62M) provide weak support for R&D spending of 213.45M, which is -0.86x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 171.85M provide limited coverage of acquisition spending of (196.18M), which is -0.88x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 264.84M provides insufficient coverage of deferred revenue obligations of 810.50M, which is 0.33x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 264.84M shows concerning coverage of stock compensation expenses of 188.03M, with a 1.41 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.83 2.69
EV to Cash from Ops. EV/CFO 11.43 28.91
EV to Debt EV to Debt 7.29 19.83
EV to EBIT EV/EBIT 288.10 -9.95
EV to EBITDA EV/EBITDA 85.16 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 12.23 26.09
EV to Market Cap EV to Market Cap 1.09 0.36
EV to Revenue EV/Rev 3.11 -9.34
Price to Book Value [P/B] P/B 8.09 3.88
Price to Earnings [P/E] P/E -83.11 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 0.36 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -63.03 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -44.96 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 213.62 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 2,415.57 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 182.85 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 59.14 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 45.10 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 50.71 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.60 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.59 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.24 1.22
Current Ratio Curr Ratio (Qtr) 0.94 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 1.21 -0.96
Interest Cover Ratio Int Coverage (Qtr) 0.36 -14.20
Times Interest Earned Times Interest Earned (Qtr) 0.36 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.20 -548.16
EBIT Margin % EBIT Margin % (Qtr) 1.08 -199.84
EBT Margin % EBT Margin % (Qtr) -1.89 -607.20
Gross Margin % Gross Margin % (Qtr) 77.90 51.88
Net Profit Margin % Net Margin % (Qtr) -3.40 -610.00