Dr. Stoxx
Stock Trader & Author, Oxford DPhil, Trading Education
Tenable looks cheap among cybersecurity software names, trading at a lower P/E than Palo Alto Networks and CrowdStrike, a lower forward P/E than Fortinet, and one of the group's lowest PEG ratios. Its chart shows a double breakout from a triangle and range highs, with low cycles and confirming on-balance volume. x.comÂ
Fortinet's valuation leaves it vulnerable to a sharp drop: it trades above 53x next-twelve-month earnings despite EPS growth below 20%. Its post-earnings tumble illustrates that risk. x.comÂ
Cybersecurity stocks are priced for near-perfect execution. Forward P/Es stand at 201x for Cloudflare, 163x for CrowdStrike, 77x for Palo Alto Networks, 44x for Fortinet, 39x for Okta and 32x for Zscaler. x.comÂ
Model labs threaten cybersecurity unevenly, so vendors split by how easily AI can absorb their work. Host agents, inline enforcement and shift-right operations dealing with people, live environments and adversaries stay relatively hard to absorb for now, favoring Palo Alto Networks, CrowdStrike, Fortinet and Netskope. Shift-left, checkable work such as vulnerability scanning is already hit hardest by stronger coding agents, exposing Tenable, Qualys and Rapid7. x.comÂ
Combining estimated NTM revenue growth with trailing GAAP EBITDA margin makes Palo Alto Networks, Datadog, JFrog, Rubrik and Snowflake look overvalued against forward EV/sales. Zoom, Alphabet, Oracle, AppLovin, Microsoft, Fair Isaac, Adobe, Amazon and Teradata remain undervalued on this Rule of 40 comparison; Palantir, Cloudflare and CrowdStrike remain overvalued. x.comÂ
Tenable's push into AI-driven exposure management is gaining momentum, which short reports from @BearCaveEmail and @citrini miss by treating it as a legacy vulnerability scanner. Tenable One reached 50% of new business, up from 41% last quarter and 40% a year ago, with larger deals and a big installed base to upsell. The shorts lean on dated sales-type experts; Tenable engineers describe a company moving fast to lead AI exposure management. It trades near 5x EV/sales, cyber majors at 20x+. x.comÂ
Tenable looks expensive against its cash earnings at $37.76. It trades at 79x cash earnings and 72x next year's, while software companies usually get 30x. Fair value sits at $13.39 to $17.04, about 30x next year's cash earnings, so buyers pay 122% above fair. This is a valuation read only, based on reported earnings and estimates. x.comÂ
Cybersecurity is a great AI play, but some valuations are getting absolutely ridiculous, and great companies are not great stocks at any price. CrowdStrike trades at 186x forward earnings and 40x sales, Cloudflare at 209x and 43x, Palo Alto Networks at 87x and 21x, and Rubrik at 327x and 11.5x. x.comÂ
Fortinet is a beautiful business because recurring security subscriptions make it highly stable and cash-generative. It is the clear leader in firewalls, protecting over 800,000 clients with fast, energy-efficient tools built on its own custom chips. x.comÂ
Palo Alto Networks looks set for a near-term move to $400-$410 after its CEO bought $10M of shares. The setup resembles Dell's, and cybersecurity looks attractive here. x.comÂ
SailPoint and Tenable are the cybersecurity names worth owning, while CrowdStrike at 167x forward earnings, a 6x PEG, and Palo Alto Networks at 89x look far too expensive. SailPoint is the cleanest play on agentic identity, not cheap at 55x earnings but much cheaper than CrowdStrike and Palo Alto with faster forecast growth. Tenable trades at 17x forward earnings with EPS growing about 13%, and its net revenue retention in exposure management just rose above 106%. x.comÂ
