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On Monday, Stephens initiated coverage on SentinelOne Inc (NYNYSE:SE: S), a company specializing in next-generation endpoint security, with an Overweight rating and a price target of $25.00. Currently trading at $18.19, with a market capitalization of approximately $6 billion, the company’s stock sits about 38% below its 52-week high of $29.29. The firm’s analysts have based this target on an enterprise value to revenue multiple of 5.5 times applied to their fiscal year 2027 revenue estimate.
SentinelOne has been acknowledged for its strong footing in the endpoint security market, with its AI leadership, robust technology, and significant presence in the Managed Security Service Provider (MSSP) channel being key differentiators. Despite experiencing a slowdown in growth over the past two years, which is projected to continue into fiscal year 2026, Stephens analysts attribute this deceleration to macroeconomic pressures and some one-time factors. According to InvestingPro data, the company maintains strong fundamentals with more cash than debt on its balance sheet and liquid assets exceeding short-term obligations.
Looking ahead, the analysts are optimistic about SentinelOne’s capacity to maintain over 20% top-line growth in the coming years. The company has already demonstrated strong performance with a 32.25% revenue growth in the last twelve months and maintains a healthy gross profit margin of 74.3%. They cite potential drivers for this growth, such as gaining additional market share in the endpoint security sector and expanding sales through its comprehensive platform capabilities, which include cloud security and security operations.
Furthermore, Stephens notes that SentinelOne has made considerable strides in enhancing its profitability. With the company reaching a positive inflection point, a balanced approach to growth and profitability is anticipated going forward.
The Overweight rating reflects Stephens’ view that SentinelOne’s current valuation presents a compelling risk/reward scenario. The firm suggests that if SentinelOne can persist in delivering around 20% top-line growth coupled with ongoing improvements in profitability, there could be room for valuation multiple expansion.
In other recent news, SentinelOne Inc has seen several analysts adjust their price targets and ratings following its latest financial results and guidance. TD Cowen lowered its price target from $35.00 to $26.00 but maintained a Buy rating, citing a conservative fiscal year 2026 outlook and macroeconomic challenges. Bernstein SocGen also reduced its price target to $27.00 from $30.00, retaining an Outperform rating despite noting a slight shortfall in annual recurring revenue (ARR) compared to expectations. DA Davidson cut its target to $18.00 from $25.00, holding a Neutral rating due to skepticism about significant improvements in net new annual recurring revenue (NNARR) growth.
Piper Sandler adjusted its price target to $28.00 from $32.00, maintaining an Overweight rating, and highlighted both challenges and positive indicators, such as growth in $100K customers and traction beyond endpoint security. KeyBanc kept a Sector Weight rating, noting a minor ARR shortfall and a projected 6% NNARR growth for fiscal year 2026, which contrasts with a previous decline. Despite the varied outlooks, SentinelOne’s management remains optimistic about future growth, citing improved sales productivity and stable win rates. Analysts have expressed mixed sentiments, reflecting the company’s strategic recalibrations and the challenging macroeconomic environment. Investors will likely continue to monitor SentinelOne’s performance as it navigates these developments.
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