Tenable Holdings, Inc. (TENB) stock intrinsic value fair value estimate & owner earnings analysis

Tenable sells subscription software that finds and prioritizes security weaknesses across a customer's computers, cloud accounts, identity systems and industrial equipment. Products include Tenable One, Tenable Vulnerability Management, Tenable Cloud Security, Tenable Identity Exposure, Tenable OT Security, Tenable Security Center and the Nessus scanner. Revenue was $999.4 million in 2025, up 11.0% from $900.0 million in 2024 (which was up 12.7% from $798.7 million in 2023). Contracted revenue not yet recognized reached $1.061 billion at the end of 2025, up from $867.5 million a year earlier. What the business earns for owners. The company reported a net loss of $36.1 million in 2025 and generated $266.8 million of operating cash flow. We do not take that cash flow at face value. First, we remove $66.9 million of 2025 working-capital inflow, mostly ($58.4 million) customers paying for subscriptions ahead of the revenue being recognized; that inflow only continues while the business keeps growing. Second, we treat stock compensation as a real cost. It was $191.8 million in 2025, about 19% of revenue, and is paid to employees instead of cash. Third, we deduct only the part of equipment and capitalized software spending needed to stand still, $14.0 million in 2025. On this basis owner earnings were about negative $6.0 million in 2025 (negative $0.05 per share) and negative $7.8 million in 2024 (negative $0.07 per share), versus a loss of $56.2 million in 2023 and $82.7 million in 2022. The business is close to break-even for its owners, not comfortably profitable, and we value it from that starting point. We use the 2024 and 2025 average (about negative $6.9 million a year) as the starting level, because those are the only two years in which owner earnings were near break-even, and they reflect the company at its present size; earlier years were much weaker and describe a smaller business. Acquired-technology amortization is added back automatically in cash flow, so the gradual fade after year 10 in each case below is our allowance for those products wearing out. The growth we give credit for. Owner earnings improved only $1.8 million from 2024 to 2025, so we would ordinarily start the base case no higher than that. We start it higher, at about $12.8 million in year one, for a specific reason in the latest quarterly report (filed August 2026): in the first half of 2026, revenue rose 9.1% to $530.6 million, stock compensation fell to $90.2 million from $102.4 million a year earlier, and operating cash flow rose to $132.7 million from $129.9 million. We credit only revenue additions of the size the company has delivered every year (between about $99 million and $115 million a year in 2023 to 2025), and only at a fraction of that: the base case adds $85 million of revenue in year one, tapering to $8.5 million by year ten, and keeps 15% of each added revenue dollar as owner earnings. That is below the roughly 24% of added revenue by which owner earnings improved between 2022 and 2025. It is also well above what the business delivered in the most recent year (about 2%), which is a real weakness in the case. We give no credit to new products, share gains or profit-margin gains beyond that. Base case, about $4.15 per share. Owner earnings climb from about negative $6.9 million to about $63 million a year by year ten, are held there, and then fade to zero over the following fifteen years. Contracted revenue of $1.061 billion, a customer base paying 106% of what it paid the year before (down from 108% in 2024 and 111% in 2023), and 2,161 customers each paying $100,000 or more a year (1,988 a year earlier) are what make us think the existing revenue persists. Nothing beyond year 25 is credited. Bear case, about $0.03 per share. Revenue growth keeps slowing, as it has from about 17% in 2023 to 11% in 2025 and 9.1% in the first half of 2026, and the net expansion rate keeps falling. Revenue additions total only $175 million over five years and stop, only 5% of each added dollar reaches owners, and owner earnings never rise above about $2 million a year before fading over ten years. Owner earnings stay negative for the first three years. Tenable also spent about $794 million on acquisitions between 2021 and 2025 (including Vulcan Cyber and Apex Security in 2025 and Eureka in 2024) without owner earnings turning positive, so we do not credit any benefit from that spending. The company also has a term loan of about $352.5 million that comes due in July 2028; cash interest paid was $26.8 million in 2025, and the loan is already reflected in the cash flow. Bull case, about $10.60 per share. Revenue additions continue at $100 million a year for five years, in line with the past three years, then taper to zero by year ten, and owner earnings keep 24% of each added dollar, the level actually reached from 2022 to 2025. Owner earnings reach about $161 million a year by year nine, are held, and then fade to zero over fifteen years. Share count and buybacks. We value the business per share on about 114 million diluted shares, the count in the second quarter of 2026, down from 120.1 million on average in 2025 after $247.5 million of share repurchases in 2025. Because stock compensation is deducted as a cost, we do not give extra credit for the buybacks. What would make this wrong. If the company can hold revenue growth near 10% and keep stock compensation falling as it did in the first half of 2026, owner earnings could rise faster than in our base case. If stock compensation resumes growing faster than revenue, as it did in 2025 (up 17% versus revenue up 11%), owner earnings could stay near zero and the bear case would apply.