Jefferies has released a report highlighting its focus on the risk exposure management sector within cybersecurity. The firm has initiated coverage of stocks including Rapid7 (RPD, Financial), Tenable (TENB), and Qualys (QLYS) for the first time.
Analyst Joseph Gallo from Jefferies has assigned a "Buy" rating to Rapid7 (RPD, Financial) with a target price of $50. Gallo noted that Rapid7 is striving to secure a portion of the $30 billion risk exposure management market, which is projected to grow at a compound annual rate of 16% by 2028. He emphasized Rapid7's progress in security information and event management as well as cloud risk management, which are significant as the company faces declining demand for its core vulnerability management solutions due to macroeconomic pressures. Gallo believes that improved execution and channel focus will benefit the company as it trades below its implied intrinsic value.
Tenable (TENB) received a "Hold" rating from Gallo, with a target price of $45. He described Tenable as the "most mature player" in risk exposure management. Gallo pointed out that Tenable One, their unified platform, provides an opportunity to offset the core virtual machine revenue slowdown by bundling other solutions. However, Tenable is still in the early stages of developing solutions outside its core area, which makes the current valuation appear reasonable.
Qualys (QLYS) was also given a "Hold" rating by Gallo, with a target price of $135. He commented that growth in adjacent areas must play a more significant role for the entire company before meaningful acceleration can occur. Gallo noted that despite Qualys focusing on sales and marketing investments, there is limited upside, especially considering its challenges in new business billing setups within its broader network coverage goals by fiscal year 2025.
