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On Thursday, Jefferies analyst Joseph Gallo adjusted the price target for SentinelOne Inc (NYSE:S) stock, reducing it to $25 from the previous $30, while upholding a Buy rating on the company’s shares. With a current market capitalization of $6.2 billion, SentinelOne’s stock has declined nearly 31% over the past year. According to InvestingPro data, analyst targets for the stock range from $18 to $36, with a consensus recommendation leaning towards Buy. The revision follows SentinelOne’s fiscal fourth-quarter results, which showed a 27% year-over-year increase in Annual Recurring Revenue (ARR), slightly missing consensus expectations. This was attributed to the end-of-life (EOL) of the Deception product. Excluding the impact of the Deception EOL, the company’s Net New ARR continued to grow at a mid-single-digit rate year-over-year.
SentinelOne’s revenue guidance for fiscal year 2026 indicated a 23% year-over-year growth, falling short of the consensus projection of 26%. The lower guidance was influenced by the Deception EOL and macroeconomic factors. InvestingPro analysis shows the company achieved impressive revenue growth of 34.4% in the last twelve months, maintaining a healthy gross profit margin of 73.6%. Get access to more detailed financial metrics and 6 additional ProTips with an InvestingPro subscription. Despite the growth deceleration and the tepid revenue outlook for FY26, Jefferies maintains confidence in SentinelOne’s robust technology position in the Endpoint security market. The firm also recognizes an emerging opportunity with Lenovo and appreciates the incremental prudence of SentinelOne’s Chief Financial Officer.
The analyst’s commentary highlighted the frustration with the growth deceleration and the lukewarm top-line guidance for FY26. However, Jefferies’ continued endorsement of SentinelOne is based on the belief in the company’s strong technological foundation and market positioning. According to InvestingPro’s comprehensive analysis, the company maintains a FAIR overall financial health score, with particularly strong metrics in growth potential. InvestingPro’s Fair Value analysis suggests the stock is currently trading near its fair value, with detailed valuation insights available in the Pro Research Report. The analyst noted that SentinelOne is trading at an extremely attractive 4 times its CY26 revenue, which contributes to the positive outlook despite recent setbacks.
SentinelOne has been navigating through the challenges presented by the end-of-life of its Deception product and broader economic conditions. Still, the company’s technology and strategic opportunities, such as the partnership with Lenovo, offer potential for future growth. Jefferies’ revised price target reflects a more conservative valuation in light of these factors but also signals confidence in the company’s long-term prospects.
In other recent news, SentinelOne Inc. reported its fourth-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.04, compared to the forecasted $0.01. The company’s revenue for the quarter was $226 million, slightly exceeding the predicted $222.24 million, reflecting a 29% year-over-year increase. SentinelOne also achieved its first full year of positive net income and free cash flow, with annual recurring revenue (ARR) growing by 27% to $920 million. Despite these positive financial results, the stock experienced a decline in aftermarket trading.
Looking ahead, SentinelOne projects its Q1 2026 revenue to be $228 million, representing a 22% growth. The company is focused on AI, data, and cloud solutions for future growth, aiming to surpass $1 billion in ARR and revenue. Additionally, SentinelOne announced the retirement of its legacy Deception product, which is expected to impact ARR by approximately $10 million in fiscal year 2026. The company plans to invest strategically in AI-driven security solutions to maintain its competitive edge in the cybersecurity sector.
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