Global spending on cybersecurity is expected to total $1.75 trillion between 2021 and 2025. It's no surprise -- 500 company CEOs who were recently surveyed identified cyber risks as the top threat to their organizations' growth. 

It has spurred a wave of innovation in preventative technologies like threat detection and vulnerability management, as companies search for proactive ways to protect their valuable digital assets. 

That's why Tenable (NASDAQ:TENB) presents such a big opportunity for investors. It owns Nessus, the most deployed vulnerability management platform on the planet, and it's just one reason you should buy the stock.

Two cybersecurity workers at their monitors who are analyzing data.

Image source: Getty Images.

An expanding threat landscape

As more of the economy moves online, companies are finding themselves facing new risks in the digital world that they've never had to contend with before. For public companies, it's not just about the loss of data or control from a ransomware attack but also the reputational hit which can cause even greater long-term damage. 

Take Robinhood Markets, the app-based stock and cryptocurrency trading platform geared toward young investors. On Nov. 3, the company experienced a cybersecurity incident which exposed the email addresses of five million customers, plus the full names of two million different customers.

While the financial impact is yet to be determined, Robinhood stock is down over 20% since the breach occurred -- keep in mind, it was just earlier this month! The road for companies to repair this broken trust with their customers, and the public, is long and expensive.

That's why prevention is always better than cure. Tenable's Zero Trust security is the type of mechanism designed to prevent data breaches, as it ensures everybody interacting with a company's networks -- even trusted people inside the organization -- must be verified continuously, with risky behavior triggering immediate alerts. 

The company's Nessus platform can also be customized and built upon to suit the specific needs of different customers, and it's currently deployed within 30,000 organizations globally with over two million individual downloads.

Big companies are flocking to Tenable

Tenable's financial performance is robust, and it's being driven by its six-figure customer base -- those who spend $100,000 or more with the company annually.

Metric

2016

2021*

CAGR

Number of six-figure customers

124

995

51%

Data source: Tenable. *2021 figure as of the third quarter. CAGR = compound annual growth rate.

By comparison, Tenable has grown its revenue at a compound annual rate of 34% since 2016. The outperformance for six-figure customer additions suggest its revenue growth rate could accelerate as larger clients become a greater share of its overall revenue base. 

Wall Street is incredibly bullish on Tenable's future. All of the 16 analysts who cover the company currently have a buy rating on the stock, and it might be because of the company's surging profitability. 

After losing $0.42 per share in 2019, Tenable generated $0.19 in adjusted earnings per share in 2020 and is expected to grow its bottom line 63% to $0.31 this year.

Tenable is dominating the industry

The U.S. government maintains a database of common vulnerabilities and exposures (CVEs). These are known cyber threats, which cybersecurity platforms work to protect against. 

As of now, there are 174,000 CVEs on the list, and Tenable protects against over 66,000 of them, which makes it No. 1 in the industry. But it's also No. 1 in accuracy with 0.32 defects (false positive readings) per one million scans -- and when a threat is detected, Tenable neutralizes it in under 24 hours on average, making it one of the fastest in the industry.

Combined with its leading position in deployment within organizations, Tenable will be incredibly difficult to disrupt in the vulnerability management space. 

For investors, the company ticks all the right boxes. When you look back five years from now, you might wish you had bought the stock. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.