U.S. stocks edge higher; solid earnings season continues
On Thursday, SentinelOne Inc (NYSE: S) experienced a price target adjustment from BTIG, with analysts lowering the goal from $30.00 to $27.00, while still maintaining a Buy rating on the company’s shares. According to InvestingPro data, analyst targets for the stock currently range from $18 to $36, with a strong consensus recommendation of 1.69 (Buy). InvestingPro analysis indicates the stock is currently fairly valued based on its proprietary Fair Value model. The adjustment follows SentinelOne’s recent financial report, which showed mixed results, including net new Annual Recurring Revenue (ARR) additions of $60.4 million, aligning closely with BTIG’s projections but slightly below Wall Street’s expectations.
SentinelOne released its fourth-quarter results for January and provided an initial outlook for fiscal year 2026 that was somewhat underwhelming compared to analyst expectations. The company has demonstrated strong revenue growth of 34.38% over the last twelve months, as reported by InvestingPro, which offers comprehensive financial analysis through its Pro Research Reports, available for over 1,400 US stocks. The company’s guidance for FY26 revenue is $1,009.5 million, representing a 22.9% year-over-year increase, which is consistent with BTIG’s estimate but falls short of the broader market’s forecast of $1,028 million.
The company’s Deception product, which is being discontinued in FY26, had a one-time negative impact on the results, contributing to $3 million in churn. Excluding this factor, the company’s performance was roughly in line with more optimistic scenarios. BTIG highlights that, aside from the Deception product’s sunset, SentinelOne’s net new ARR growth is back in positive territory and is projected to grow around 5% year-over-year in FY26.
SentinelOne’s stock dropped 12% after the market closed, with the NASDAQ remaining flat, reflecting investor unease. However, BTIG analysts remain optimistic, pointing out that new products outside of SentinelOne’s core endpoint security portfolio represented over 50% of last year’s bookings and are gaining strong traction. Additionally, the company’s free cash flow (FCF) profile is improving rapidly.
Despite the volatility experienced last year, SentinelOne exceeded its initial revenue guidance by $6.5 million, or 0.8%, and translated all of the revenue upside into operating income. The company maintains a healthy balance sheet with more cash than debt, and a solid current ratio of 1.63. With the FY26 guidance appearing conservative and the stock trading at 4.0x 2026 estimated enterprise value to sales, compared to the typical security company at 6.5x with 12% growth, BTIG reaffirms its Buy rating, citing an attractive risk-reward balance for investors. InvestingPro subscribers can access additional insights, including 6 more exclusive ProTips and detailed valuation metrics for more informed investment decisions.
In other recent news, SentinelOne Inc. (NYSE:S) reported its fourth-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.04, against the forecasted $0.01. The company’s revenue for the quarter reached $226 million, slightly above the forecast of $222.24 million, marking a 29% year-over-year increase. Despite these positive results, the company’s revenue guidance for fiscal year 2026 indicated a 23% year-over-year growth, falling short of the consensus projection of 26%, partly due to the end-of-life (EOL) decision for its Deception product. Analysts from Raymond (NSE:RYMD) James and Jefferies both adjusted their price targets for SentinelOne to $25 from $30, maintaining Strong Buy and Buy ratings, respectively, while acknowledging the impact of the Deception EOL and macroeconomic factors on the company’s outlook.
Raymond James analyst Adam Tindle noted that SentinelOne’s fourth fiscal quarter results demonstrated better-than-expected revenue and profitability, although the Net New Annual Recurring Revenue (NNARR) fell short of expectations due to the EOL decision. Jefferies analyst Joseph Gallo expressed confidence in SentinelOne’s robust technology position, despite the growth deceleration and tepid revenue outlook for FY26. Both analysts highlighted SentinelOne’s strong technological foundation and market positioning as key factors in their continued endorsement of the company.
SentinelOne’s first full year of positive net income and free cash flow was a significant milestone, reflecting the company’s successful execution of its strategic initiatives in AI and cloud security. The company’s focus on AI, data, and cloud solutions for future growth remains a priority, with plans to invest strategically in these areas to maintain a competitive advantage. Additionally, the company has reached a milestone by stopping its operating losses in the fourth fiscal quarter, with guidance for fiscal year 2026 suggesting further profitability alongside robust growth.
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