SailPoint (SAIL) posted solid fiscal Q2 results across its annual recurring revenue, or ARR, and profitability even though the company's revenue slightly missed expectations amid a SaaS transition, RBC Capital Markets said.

The investment firm said in a note Wednesday that investor expectations remained high due to the company's agentic security opportunity, while management maintained a conservative guidance posture and only flowed the Q2 beat through to its fiscal 2027 guidance.

RBC noted, however, that the potential for upside could become more significant as the company's agentic pipeline matures and converts, adding that AI could become an increasingly important tailwind to growth.

SailPoint remains well positioned to benefit from identity-security momentum and increased agent deployments, while its AI pipeline could contribute more meaningfully to results in the second half of the year.

As the agentic pipeline matures, RBC expects higher conversion rates to drive material ARR increases among existing customers while creating an ample opportunity to win new customers.

RBC kept SailPoint's outperform rating and $22 price target.

Shares of the company were up 4.5% in Thursday trading.

Price: 18.37, Change: +0.79, Percent Change: +4.47