By Emily Dattilo

SentinelOne reported quarterly earnings that beat analysts' estimates but the stock was falling sharply in premarket trading. Wall Street said there was plenty to be positive about at the cybersecurity company.

SentinelOne stock fell 14% to $16.64 in premarket trading Thursday.

For its fourth quarter, the cybersecurity company reported adjusted earnings of 4 cents a share, beating Wall Street's call for profit of 1 cent, according to FactSet. Revenue of $225.5 million was above the consensus estimate for $222.2 million. Annualized recurring revenue, or ARR, increased 27% from the year prior.

Guggenheim analysts led by John DiFucci praised the quarter and maintained a Buy rating but trimmed its price target to $28 from $31.

"This was the first full year of positive net income, EPS, and FCF," analysts wrote. "Management highlighted that F4Q competitive win rates were strong and improved compared to prior quarters and average deal size and ARR per customer continued to increase."

William Blair analysts led by Jonathan Ho, who rate the stock at Outperform, chimed in on another element of the business.

"SentinelOne's AI solution had over 300 deals signed in the quarter, which we view as a positive sign of the company's generative AI capabilities from early adopter customers," they wrote.

For its fiscal first quarter ending April 30, SentinelOne said it expects revenue of $228 million, while analysts expected $235 million.

For fiscal 2026 ending Jan. 31, the company anticipates revenue of $1.007 billion to $1.012 billion, while analysts had penciled in $1.027 billion.

BTIG analysts Gray Powell and Trevor Rambo weighed in on the financial outlook in a note titled "It's Not That Bad." The team cut its price target to $27 from $30 and reiterated a Buy rating.

"We pressed management on overall visibility and the level of conservatism within guidance. We liked the answers. The company stressed they have bigger deals in the pipeline than ever before with the average deal size up double digits," analysts wrote. "More importantly, S is putting more scrutiny on deals that get into the pipeline."

Write to Emily Dattilo at emily.dattilo@dowjones.com

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March 13, 2025 08:08 ET (12:08 GMT)

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