SailPoint (SAIL) is in a good position to capitalize on rising identity spend and maintain durable growth while driving margins up, RBC Capital Markets said in a note Monday.

RBC analysts pointed to factors including spending for identity security remaining a top priority and room to grow in Identity Governance and Administration.

"As the company executes on the SaaS transition, we believe profitability is biased upward," the report said.

The analysts said the company's roots are in IGA, but it has worked on rebranding as a Cloud Identity Security vendor.

"This is a trend we think that could help support durable LT profitable growth," they said.

RBC began coverage of the stock with an outperform rating and a $27 price target.

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