SailPoint Technologies Holdings (NASDAQ:SAIL) shares gained more than 2% in premarket trading today after Morgan Stanley upgraded the stock from Equal Weight to Overweight and raised its price target to $25.
The brokerage said SailPoint was well positioned to expand its presence in the identity market, holding more than 20% share in the identity governance and administration (IGA) segment. Analysts projected a 28% ARR compound annual growth rate from FY23 to FY26, supported by the company’s SaaS transition, legacy system replacements, and strong upsell and cross-sell momentum.
Morgan Stanley noted investors had been hesitant to assign a high-growth security multiple until SailPoint demonstrated success in adjacent identity security areas. Early traction was highlighted in machine identity, which contributed “low-millions” in ARR less than a year after launch, and in non-employee risk management and data access security, where ARR more than doubled year-over-year.
The firm concluded that ongoing SaaS tailwinds, expanding product adoption, and replacement opportunities positioned SailPoint to sustain more than 20% ARR growth.
