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On Thursday, Bernstein SocGen Group adjusted its outlook on SentinelOne Inc (NYSE:S), reducing the cybersecurity firm’s price target from $30.00 to $27.00, while still endorsing the stock with an Outperform rating. The adjustment comes following the company’s fourth-quarter fiscal year 2025 results, which presented a revenue surpassing guidance by 1.6% and a consistent net retention rate (NRR) of 110%. According to InvestingPro data, SentinelOne maintains a strong financial position with more cash than debt on its balance sheet, while analysts expect continued sales growth this year.
In his analysis, the Bernstein SocGen analyst highlighted SentinelOne’s revenue performance as a positive note, but tempered the enthusiasm with the observation that the quarter-over-quarter annual recurring revenue (ARR) did not meet the previous year’s figures. This was particularly notable given the expectations for growth drivers, such as product adoption and new customer acquisitions, following a competitor’s outage in the past summer. The company has demonstrated impressive revenue growth of 34.38% over the last twelve months, though InvestingPro analysis suggests the stock is currently trading near its Fair Value.
The forecast for fiscal year 2026 also prompted some concern as it fell nearly 2% short of the consensus. In response to these results, Bernstein SocGen made some adjustments, including a narrower Q4 margin and the exclusion of revenue from SentinelOne’s Deception product. These changes have led to a revised outlook for revenue growth in FY26.
The price target was recalculated using a mixed valuation approach, which includes a roughly 9x price to next twelve months (NTM) revenue multiple, a decrease from the previously applied 10x multiple, and a discounted cash flow (DCF) model with a 13% weighted average cost of capital (WACC) and a 3% terminal growth rate. Despite the lowered price target, Bernstein SocGen maintains its positive Outperform rating on SentinelOne shares.
In other recent news, SentinelOne Inc reported an annual recurring revenue (ARR) of $920.1 million for the fourth quarter, reflecting a 27% year-over-year increase, though it slightly missed the consensus estimate. The company’s guidance for fiscal year 2026 also fell short of expectations, with projected revenue growth of 23% year-over-year, impacted by the discontinuation of certain products. Analysts have responded with various adjustments to their price targets: DA Davidson lowered its target to $18 while maintaining a Neutral rating, and Citi revised its target to $21, also keeping a Neutral stance. Piper Sandler reduced its target to $28 but maintained an Overweight rating, citing positive signs despite challenges. Meanwhile, Needham adjusted its target to $23, retaining a Buy rating, and highlighted the adoption of emerging solutions like Cloud and AI technologies. KeyBanc maintained a Sector Weight rating, noting a minor shortfall in ARR and expressing caution about the company’s future NNARR growth amid a challenging economic landscape. These developments reflect a mixed outlook for SentinelOne, with analysts noting both potential and challenges in the company’s financial performance and strategic direction.
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