Can NABL sustain its earnings growth into Q1 2025?

N-able's ability to sustain its earnings growth into Q1 2025 is uncertain based on current projections and recent performance metrics. Here's an analysis to support this view:

1. Recent Performance: N-able's latest report period is for Q4 2024, and the company's stock is currently trading below the price target set by BMO Capital Markets, which recently reduced its price target from $13.50 to $8.50. This reduction suggests a more cautious outlook from the analyst, which could indicate concerns about the company's future growth.
2. Q1 2025 Estimates: The estimated EPS for N-able in Q1 2025 is $0, which is a significant drop from the non-GAAP EPS of $0.11 reported in Q1 2024. The estimated revenue for the quarter is $115.72 million, which is slightly above the revenue reported in Q1 2024 ($113.7 million). However, this slight increase may not be enough to sustain the growth rate seen in the previous quarter.

3. Historical Performance: N-able's subscription revenue grew by 14.4% year-over-year to $111.5 million in Q1 2024. While this is a positive indicator, the company's full-year revenue guidance for 2025 fell short of analyst expectations. This could suggest that the growth momentum might not translate into sustained quarterly growth.
4. Market Conditions: The cybersecurity sector is growing, which is a positive industry trend for N-able. However, the company's ability to capitalize on this growth and sustain its earnings growth will depend on its strategic initiatives and market execution.
5. Financial Health: N-able's financial health, with a strong balance sheet and liquidity, is a positive sign. However, the need for consistent revenue generation and execution, as noted by BMO, is crucial for sustaining growth expectations.

In conclusion, while N-able has shown strong performance in the past, the outlook for Q1 2025 based on current estimates and analyst sentiment suggests that sustaining earnings growth may be challenging. The company's ability to execute its strategic plans and capitalize on industry growth will be key factors in determining its future performance.