SailPoint Technologies Holdings, Inc.

SailPoint Technologies Holdings, Inc. (NYSE: SAIL) provides enterprise identity governance solutions situated in the United States. It primarily creates, develops, and sells identity governance software that allows businesses to control user access to essential systems and data.

Key Highlights:

• The company posted a net loss of USD 61.63 million in FY21 compared to net losses USD 10.76 million in FY20, owing to a severe increase in operational expenses and a decrease in other income.
• As of December 31, 2021, the company stood at the cash of USD 435.44 million in FY21 against USD 510.29 million in FY20.
• On April 11, 2022, the company announced that it would be acquired for USD 6.9 billion by Thoma Bravo, a significant software investment group. Upon conclusion of the sale, the company will become a privately held firm.
• In Q4 FY21, the company's cash conversion cycle was 79.2 days, compared to the industry median of 25.5 days.
• In Q4FY21, SAIL had a negative EBITDA margin of 1.5% compared to a buoyant industry median of 4.7%. In addition, the company's debt-equity ratio was 0.95 in Q4 FY21, compared to the industry median of 0.17.
• The stock has made a new 52 weeks high of USD 64.05 and rose 45.53% in three months. Further, the 14-day RSI of the stock is ~81.34, indicates a potential pull back in the stock from the current trading levels.

Stock Recommendation

Based on the increased losses, the decline in cash position, negative margins, and unfavourable technical indicators, we recommend a "Watch" rating on the stock at the closing price of USD 64.05, up 29.16% as of April 11, 2022.

SAIL’s Technical Price Chart (as of April 11, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Summary

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV. 

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.