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On Thursday, TD Cowen made adjustments to SentinelOne Inc’s (NYSE:S) financial outlook, with a decreased price target despite maintaining a positive overall rating. The cybersecurity firm’s price target was lowered from $26.00 to $24.00, but the Buy rating remains intact. According to InvestingPro data, the stock currently trades at $17.40, with analyst targets ranging from $17 to $36, suggesting potential upside despite recent challenges. Shaul Eyal, the analyst from TD Cowen, provided insights into the decision, citing a mix of in-line first-quarter results and a modest reduction in the fiscal year 2026 guidance due to macroeconomic uncertainties leading to some slippage in performance.
Eyal highlighted that although the company’s management is confident in achieving growth in the low 20s percentage year-over-year, there is an acknowledgment of the need to balance growth with profitability. This approach, however, may result in the stock being range-bound in the near term. InvestingPro analysis reveals strong fundamentals, with the company maintaining a healthy current ratio of 1.74 and holding more cash than debt on its balance sheet. While not currently profitable, analysts predict profitability this year, as indicated by one of several InvestingPro Tips available to subscribers. The analyst pointed out that the after-hours valuation of SentinelOne was less than 5 times the fiscal year 2027 enterprise value to revenue, a figure that could potentially attract strategic interest.
TD Cowen anticipates SentinelOne’s shares will trade at a mid-single-digit multiple of its fiscal year 2027 revenue, despite the company’s revenue growth exceeding 20% year-over-year. This valuation is notably lower compared to peers who enjoy double-digit multiples. The firm suggests that until SentinelOne can demonstrate a sustainable reacceleration of growth, the valuation discount is likely to persist.
The analyst also noted that while the focus for SentinelOne remains on improving execution and go-to-market strategies, strategic alternatives could become a more significant consideration in the long term if growth sustainability continues to be tepid. Despite the lowered price target, TD Cowen maintains its Buy rating, reflecting a belief in the company’s potential for growth and profitability in the evolving cybersecurity market. The company has demonstrated strong revenue growth of 32.25% over the last twelve months, and InvestingPro’s comprehensive analysis suggests the stock is currently undervalued. Discover more insights and detailed valuation metrics with InvestingPro’s exclusive research report, available along with real-time alerts and advanced financial metrics for over 1,400 US stocks.
In other recent news, SentinelOne Inc has reported its first-quarter earnings for fiscal year 2026, revealing mixed results. The company achieved a slight revenue beat but fell short of expectations on net new annual recurring revenue (NNARR) and billings, leading to a downward revision of its full-year revenue guidance. This revision was attributed to economic uncertainty and deal delays in April. In response, several analysts have adjusted their ratings and price targets for the company. Bernstein SocGen lowered its price target to $25 from $27, maintaining an Outperform rating, while Cantor Fitzgerald kept a $24 target with an Overweight rating, expressing optimism about a recovery in NNARR during the second quarter. Scotiabank (TSX:BNS) reduced its price target to $18, holding a Sector Perform rating, noting concerns over competition and potential growth challenges. JPMorgan downgraded SentinelOne from Overweight to Neutral, cutting its price target to $19 due to growth concerns and missed ARR projections. DA Davidson also revised its target to $17, maintaining a Neutral rating, citing the company’s NNARR shortfall and macroeconomic challenges. Despite these adjustments, SentinelOne continues to show growth in key areas such as Cloud, AI, and Data, with international revenue seeing a 27% year-over-year increase.
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