Security software companies Tenable Holdings Inc (NASDAQ:TENB), Varonis Systems Inc (NASDAQ:VRNS) and Qualys Inc (NASDAQ:QLYS) are gearing up to report their quarterly earnings on May 6.
While security continues to be a top priority for Chief Information Officers, industry checks reveal that tariffs and currency headwinds have limited impact on security spending, according to JPMorgan.
The Security Software Analyst: Analyst Brian Essex maintained ratings, while cutting price targets.
- Tenable Holdings: Overweight, price target reduced from $53 to $43
- Varonis Systems: Overweight, price target cut from $55 to $45
- Qualys: Underweight, price target trimmed from $122 to $117
The Security Software Thesis: Although tariffs pose less of a threat on security spending,there is limited visibility into the performance of security software companies due to enterprises facing macro uncertainty, Essex said in the note.
Check out other analyst stock ratings.
Tenable Holdings
The company is likely to report solid results, despite core VM (virtual machine) featuring lower in the list of enterprises’ spending priorities, the analyst stated.
If Tenable Holdings beats expectations but does not pass through the outperformance to the guidance, preferring to play it safe, this would be seen as a positive, he added.
Varonis Systems
“We see potential for VRNS to beat SaaS expectations this quarter as the company moves to accelerate its transition this year,” Essex wrote.
Management’s full-year guidance is already conservative, which Varonis Systems could outperform due to its healthy fundamentals, he said.
Qualys
The company may deliver “another quarter of billings deceleration,” given tougher comps, the analyst stated.
Management needs to remain conservative in their guidance due to Qualys’recent sales execution issues, he further said.
Price Target Reductions:
The price target for the three companies has been reduced “to reflect lower peer multiples,” Essex wrote in the note.
At the time of publication on Monday, shares of:
- Tenable Holdings had risen by 0.39% to $33.11
- Varonis Systems had risen by 0.05% to $42.30
- Qualyshad risen by 0.21% to $127.02
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