Tenable stock plunges as Wedbush says soft billings, guidance 'tough pill to swallow'
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Tenable (NASDAQ:TENB) shares plunged more than 17% in pre-market trading on Tuesday as investment firm Wedbush Securities said the weak billings and guidance from the cybersecurity firm is a "tough pill to swallow," given the current global economic picture.
Analyst Dan Ives maintained his outperform rating on Tenable (TENB), but lowered the per-share price target to $45 from $51, noting that while the pipeline is strong, the company's management is now being more cautious.
"This clearly was not the results that the bulls were hoping for as the Street now worries around an environment that is still seeing some further deterioration in spending trends for TENB," Ives wrote in an investor note. "With billings for the year being lowered by ~4% we believe management has now set a conservative bar that assumes soft sales cycles for the rest of the year even though a number of slipped deals was already closed in April."
Looking to the second-quarter, Tenable (TENB) expects sales to be between $189M and $191M, below the $193.76M consensus. Adjusted earnings are forecast to be between 12 and 13 cents per share, above the 10 cent consensus.
For the full-year, Tenable (TENB) adjusted its current billings forecast, as it now expects them to be between $875M and $885M. Revenue is forecast to be between $775M and $785M, below the $805.39M that analysts were forecasting.
Adjusted earnings are forecast to be between 57 and 61 cents per share, above the 53 cents analysts were expecting.
Free cash flow for the full-year is expected to be between $175M and $180M. 
Despite the weak outlook, Ives said the risk-reward on Tenable (TENB) is "very compelling" and it is likely that the company will recover from what he called a "stumble."
Other cybersecurity stocks were lower following Tenable's (TENB) results, including Palo Alto Networks (PANW), Zscaler (ZS) and Cyberark Software (CYBR).
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