1 Small-Cap Growth Stock Down 65% to Buy on the Dip, According to Wall Street

Tenable (NASDAQ: TENB) is a cybersecurity company that specializes in exposure management. It offers a portfolio of proactive tools designed to help enterprises patch vulnerabilities in their networks before they can be exploited.

With a market capitalization of just $2.5 billion, Tenable is much smaller than other cybersecurity vendors like CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW), which are both valued at around $100 billion. Its business hasn't grown quite as fast as those powerhouses, which is why its stock is often overlooked. In fact, Tenable shares are down 65% from their peak in 2022.

But Wall Street sees an opportunity. The majority of the analysts tracked by The Wall Street Journal rate Tenable stock a buy, and none recommend selling. Their consensus price target points to significant upside from here.

Here's why their bullish stance might be justified.

Image source: Getty Images.

A leader in exposure management

Tenable is the owner of Nessus, a platform that actively scans operating systems, networks, and devices for vulnerabilities so they can be fixed before malicious actors can exploit them. Nessus is one of the cybersecurity industry's most accurate and widely adopted vulnerability management solutions, but it has also become an important on-ramp for many of Tenable's more sophisticated products.

In 2022, the company launched the industry's most comprehensive exposure management solution called Tenable One, which rolled many of its most successful products into one unified platform. It is now infused with artificial intelligence (AI), which makes Tenable even more effective at identifying the potential attack paths hackers might choose to exploit.

Plus, the ExposureAI feature within Tenable One makes human cybersecurity managers more productive than ever before by rapidly compiling data, uncovering hidden risks, and providing insights that can accelerate decision-making.

During the fourth quarter of 2025 (ended Dec. 31), Tenable One accounted for 46% of all new business for the company, which was a record high. This truly highlights the growing demand for AI-powered solutions in the corporate world.

Tenable exceeded its financial guidance in 2025

Tenable generated a record $999.4 million in total revenue during 2025, which was up 11% from the prior year, and comfortably cleared management's forecast range of $988 million to $992 million.

The company had a record 2,161 customers with annual contract values of over $100,000 at the end of 2025, so its revenue beat partly came from winning over large organizations that have sizable cybersecurity budgets.

Tenable's operating expenses totaled $789.6 million during 2025, which was up 11% compared to 2024, matching the pace of its revenue growth. As a result, the company's generally accepted accounting principles (GAAP) net loss was almost identical to its 2024 net loss, coming in at just over $36 million.

However, there was a big difference after excluding one-off and noncash expenses like stock-based compensation, with Tenable generating an adjusted (non-GAAP) profit of $194.4 million, which was up 22% compared to 2024. Management had forecast an adjusted profit of up to $189 million, so the company exceeded expectations at the bottom line, too.

Wall Street is bullish on Tenable stock

The Wall Street Journal tracks 23 analysts who cover Tenable stock, and 12 have given it a buy rating. Two others are in the overweight (bullish) camp, while the remaining nine recommend holding. None recommends selling.

The analysts have an average price target of $30.72, implying the stock could climb 42% over the next 12 to 18 months. However, the Street-high target of $40 suggests a much greater potential upside of 85% instead.

I think both targets are achievable because of the stock's attractive valuation. Based on Tenable's 2025 revenue of $999.4 million and its current market capitalization of $2.5 billion, the stock trades at a price-to-sales (P/S) ratio of just 2.5, a substantial discount to vendors like CrowdStrike and Palo Alto Networks.

Data by YCharts.

I'm not suggesting Tenable deserves to trade in line with the valuations of Palo Alto and CrowdStrike, because not only are their businesses significantly larger, but they are also growing faster. Palo Alto's revenue increased by 16% during the recent quarter, and CrowdStrike's revenue jumped by 22%. Long-term investors will typically pay a premium for faster-growing businesses because they might look cheap when measured against their future revenue.

However, I think Tenable's whopping 88% valuation discount to CrowdStrike is far too steep, given the quality of its business. Besides, even if the stock hits Wall Street's consensus price target of $30.72, that would lift its P/S ratio to just 3.6, which would still be cheap in my opinion.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.