SentinelOne’s S shares have declined 11.7% in the trailing 12-month period, underperforming the Zacks Computers IT Services industry’s appreciation of 11.8% and the broader Zacks Computer & Technology sector’s 25.8% return.

Although the company has been suffering from a challenging macroeconomic condition, Annualized Recurring Revenue (ARR) grew 29% year over year to $859.7 million in the third quarter of fiscal 2024. 

Customers with an ARR of $100,000 or more grew 24% year over year to 1,310 as of Oct. 31, 2024. ARR per customer increased by double digits year over year, driven by strong platform adoption and success with larger enterprises.

SentinelOne raised its fiscal 2025 revenue growth guidance driven by a strong portfolio and rich partner base. It currently expects revenues of $818 million, implying 32% year-over-year growth at the mid-point compared with the previous guidance of 31%. For the fourth quarter of fiscal 2025, revenues are expected to be $222 million.

SentinelOne Stock Performance

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Innovative Portfolio Aids SentinelOne’s Prospects

SentinelOne’s long-term growth trajectory remains intact, driven by an innovative portfolio. Its Singularity platform unifies data capabilities and AI-powered security across endpoint cloud identity as well as third-party integrations, all in one single user interface.

Solutions including Singularity Endpoint, Singularity Cloud Security, Singularity Data and Purple AI are helping SentinelOne address a total market worth more than $100 billion. The total Addressable Market for Endpoint Security, Data Analytics, Cloud Security and Generative AI Security is currently pegged at $17 billion, $31 billion, $12 billion and $3 billion, respectively, which offers significant growth opportunities for SentinelOne.

The Singularity platform is enhanced by Purple AI, SentinelOne’s advanced Generative AI (GenAI) security analyst. Purple AI significantly accelerates threat hunting and investigations, reduces Mean Time to Response and provides comprehensive end-to-end enterprise security. Purple AI suite has evolved to be the company’s fastest-growing solution.

SentinelOne’s innovative portfolio is winning accolades. It recently emerged as a frontrunner in the 2024 MITRE ATT&CK Evaluations: Enterprise with the Singularity platforms achieving 100% detection and zero detection delays in the marquee third-party evaluation, detecting 80 out of 80 attacks in the simulation across every stage. 

Gartner’s 2024 Magic Quadrant for Endpoint Protection Platforms puts SentinelOne in the Leaders Quadrant along with CrowdStrike CRWD and Microsoft MSFT.

SentinelOne Rides on a Rich Partner Base, Strong Liquidity

SentinelOne’s partner base, which includes Alphabet, Lenovo, Amazon AMZN and ServiceNow, is helping it win customers.

Singularity Cloud Workload Security for Serverless Containers provides real-time, AI-powered protection for containerized workloads running on Amazon Web Service Fargate for Amazon ECS and Amazon EKS.

The company also deepened its integration with Amazon Web Service, notably Purple AI becoming available through Amazon Bedrock, which expanded SentinelOne's capabilities to assist organizations in securing GenAI applications.

In the third quarter of fiscal 2025, SentinelOne partnered with Lenovo to pre-install the Singularity platform and Purple AI on enterprise PC shipments, drastically increasing its market reach.

The SentinelOne App seamlessly syncs threats into ServiceNow Incident Response for security operations and incident response.

The company’s strong liquidity position is noteworthy. As of Oct. 31, 2024, it had cash, cash equivalents and short-term investments of $1.1 billion and zero debt.

SentinelOne’s Earnings Estimate Revision Steady

The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at 2 cents per share, unchanged over the past 60 days, indicating 107.14% year-over-year growth.

The consensus mark for revenues is pegged at $817.96 million, indicating year-over-year growth of 31.68%. 

The Zacks Consensus Estimate for the fourth quarter of fiscal 2025 earnings is pegged at 1 cent per share, unchanged over the past 60 days, indicating 150% year-over-year growth.
 

The consensus mark for revenues is pegged at $222.01 million, indicating year-over-year growth of 27.46%.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

What Should Investors Do Now?

SentinelOne’s strong portfolio, which leverages AI and a strong partner base, is a positive. 

However, the Value Score of F suggests a stretched valuation at this moment. 

The stock is trading at a premium with a forward 12-month P/S of 7.65X compared with the broader sector’s 6.97X.

Price/Sales (F12M)

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SentinelOne currently has a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable time to accumulate the stock. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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