Wolfe Research analyst Alex Zukin raised the price target on SailPoint Technologies Holdings (NASDAQ: SAIL) to $18.00 (from $15.00) while maintaining a Outperform rating.

The analyst comments "SAIL delivered solid 1Q results that were ahead of guidance and raised the outlook for the full year. Total ARR grew 25.7% and was 70bps ahead of consensus (vs a beat of 30bps last quarter) with total NNARR of $38M down 21% Y/Y. SaaS ARR was up 36% with SaaS NNARR +5% reported and +36% CC, representing 92% of total NNARR (vs 69% in 1QFY26), driven by platform modernization, continued migration activity (migration ARR more than doubled Y/Y), emerging products (ARR more than doubled Y/Y, representing 20% of NNARR in the quarter), and AI security solutions which represented a significant portion of emerging product ARR. NHI represented 40% of identity growth and now represents 14% of the total identity base. On the profitability front, operating margin beat of ~2.4pt vs. guidance (vs a 0.4pt beat in Q4FY26) represents 330bps of margin expansion Y/Y. 2Q guidance was in-line to ahead of consensus while full year ARR was raised by $8M (in-line with the 1Q beat) and now calls for growth of 21.7% at the MP (21% previously). Pipeline for AI security doubled Q/Q, however this opportunity is not meaningfully baked into the guidance, while management continues to expect 90-95% of FY27 NNARR to come from SaaS and 10% of the on-premise base to convert to SaaS in FY27 at a 2-3x uplift. All in, we thought the quarter was solid with bigger top-line beats than 4Q and results above the high end of the guidance. However, feedback from investors suggests that they were expecting an even bigger beat in the quarter. Additionally, with the ARR guidance raised by only the beat in the quarter, it feels like there is a disconnect between management's bullish commentary related to the AI Identity security opportunity and the timing at which the ARR associated with that opportunity will show up in the numbers. That being said, management continues to message that AI could be a more meaningful driver in 2H, which we would expect to be mostly upside to the current outlook. Reiterate OP."