Investing.com -- Shares of SailPoint could face pressure after analysts at Bank of America Securities downgraded the identity security provider to Neutral from Buy, citing concerns over slowing growth and increasing competition from broader cybersecurity platforms.

BofA maintained its $16 price objective but argued that SailPoint’s focus on identity governance may leave it vulnerable as customers increasingly favor integrated identity and access management (IAM) platforms offered by larger security vendors and hyperscalers. The firm also pointed to SailPoint’s ownership structure, noting that private equity sponsor ownership of roughly 84.6% could create an overhang on the stock.

The downgrade reflects growing caution around the durability of SailPoint’s growth as the company moves beyond the bulk of its software-as-a-service transition. SaaS now accounts for 67% of subscription revenue and has been the primary growth engine, expanding 32% to 35% year-over-year over the past four quarters. However, analysts believe much of that growth was driven by customer migrations from legacy licensing models, a tailwind that is beginning to fade.

BofA expects SaaS growth to slow to 27% and 20% over the next two years. While management recently nudged full-year revenue growth guidance higher, from 18.1% to 18.5%, the firm said the increase was modest and supports a more measured outlook.

Still, analysts highlighted several emerging growth drivers that could help offset those concerns. Annual recurring revenue tied to SaaS offerings continues to rise, with SaaS accounting for 92% of net new ARR, up from 69% a year ago. Newer products are also gaining traction, including the company’s Agentic Fabric initiative targeting non-human identities, which now represents 40% of identity growth and has seen ARR increase more than 50%. Emerging products contributed more than 20% of net new ARR during the period.

BofA said AI-related opportunities remain relatively small today but could provide a meaningful incremental growth avenue over time, helping SailPoint maintain its leadership position in the expanding identity security market despite intensifying competition.