Renowned investor Jim Cramer expressed strong reservations about SailPoint Technologies (SPT), stating he avoids the stock due to perceived risks in its business model. The comment, made during a recent market commentary, has sparked renewed investor concern about the cybersecurity firm’s growth trajectory and valuation.
- Jim Cramer publicly discouraged investment in SailPoint (SPT), calling it 'too risky'
- SailPoint reported $438M in FY2024 revenue with Q3 2024 subscription growth at 14%
- Adjusted EBITDA margin declined to 18% in FY2024 from 25% in 2022
- SPT’s forward P/E is 30x, with EV/revenue at 12.5x, viewed as high relative to peers
- Short interest in SPT rose to 8.4% in early January 2026, up from 4.1% in December 2025
- Stock underperformed the S&P 500 Tech Index by 12% over the past six months
Jim Cramer voiced stark skepticism toward SailPoint Technologies (SPT), declaring, "I just do not want to be in anything like that," in a recent on-air segment. The remark underscores growing unease among prominent market voices about the company’s long-term sustainability, despite its presence in the high-growth identity and access management sector. Cramer’s warning comes amid broader market skepticism toward software stocks with elevated valuations and uncertain revenue conversion timelines. SailPoint, which reported $438 million in annual revenue for fiscal year 2024, has faced challenges in maintaining consistent growth, with subscription revenue growth decelerating to 14% year-over-year in Q3 2024—well below the 20%+ rates seen in prior quarters. The company’s adjusted EBITDA margin has also contracted to 18%, down from 25% in 2022, signaling rising operational pressures. These metrics are under increased scrutiny as investors reassess the sustainability of SaaS business models in a rising interest rate environment. The stock, trading at approximately $132 per share as of early January 2026, has underperformed the broader technology sector, declining 12% over the past six months despite a 6% rally in the S&P 500 Tech Sector Index. Cramer’s commentary has amplified the sell-side sentiment, with several brokerages issuing cautious outlooks. The move could influence institutional positioning and retail trading behavior, particularly in momentum-driven portfolios that rely heavily on high-conviction analyst narratives. Market participants across hedge funds, ETF managers, and individual investors are now reevaluating their exposure to SPT, especially given its 30x forward price-to-earnings ratio and a current enterprise value-to-revenue multiple of 12.5x, which some analysts consider stretched relative to peers like Okta (OKTA) and ForgeRock (FORG). The sentiment shift may lead to increased short interest, with the SPT short ratio rising to 8.4% as of January 13, up from 4.1% in December 2025.