SentinelOne is a top technology company that offers cloud cybersecurity services using the power of artificial intelligence. It introduced the Extended Detection and Response platform to make cybersecurity highly autonomous. Its technology sees threats, protects companies from them, and resolves them using AI.
SentinelOne is used by companies from around the world, with the most notable ones being McKesson, Canva, Samsung, Estee Lauder, and Hitachi, among others. As a result, its annual revenue has grown from over $46.5 million in 2019 to over $612 million in the last financial year.
SentinelOne, like other companies in the cybersecurity industry, provides its services in the form of a subscription.
SentinelOne’s stock has not done well over time. After peaking at $78.38 in 2021, it has dropped by almost 70% to the current $23.60. This retreat has brought its market cap to $7.5 billion.
SentineOne’s stock was trading at $23.70 as its HypeIndex figure rose to 171%.
Learn more about SentinelOne here.
Positive hype
The main reason why the SentinelOne stock has seen higher hype is that its stock has done well in the past few months. It rose from $14.3 in August to the current $23.57.
Its positive hype is also because of the rising demand for AI-related assets. Analysts believe that the AI industry growth has more room to run over time.
SentinelOne’s revenue is still growing by double digits. Its last results showed that its revenue grew by 28% to $210 million. Its annualized recurring revenue rose by 29% to $859 million.
Large companies are selecting SentinelOne, especially after the last CrowdStrike outage. Companies paying $100,000 rose by 24% to 1,310, a figure that will continue growing.
SentinelOne’s revenue growth is happening as its margin expansion accelerates. Its gross profit margin rose to 75% from the previous 73%. Operating margin improved from minus 50% to minus 42%.
Analysts expect that SentinelOne’s revenue growth will continue. They expect that its current quarter’s revenue will be $222 million, up by 27.6% from the same period last year.
The annual revenue is expected to be $818 million, up by 31.7% from last year. It will then cross the $1 billion level in the next financial year.
The average SentinelOne stock forecast by analysts is $29.64, much higher than the current $23.57.
Negative hype
The biggest negative hype is that the company lowered its forward guidance in the last results. Its Q4’25 guidance is for revenues to be $222 million and its operating margin to be minus 3%.
There are signs that the company is overvalued based on the Rule of 40 gauge. While its revenue growth is 28%, its net profit margin is minus 37%, giving a multiple of minus 9%. This is a sign that the management is prioritizing growth over profits.
SentinelOne is facing substantial competition from the likes of Wiz, CrowdStrike, and Palo Alto Networks.
Most large companies already have their cybersecurity providers, meaning that it lacks room for growth.
SentinelOne stock price analysis
The daily chart shows that the S share price has been in a strong downward trend in the past few days. This retreat happened after the stock formed a rising wedge chart pattern, a popular bearish sign.
SentinelOne has moved below the 50-day and 200-day Exponential Moving Averages. It has found support at the 200 EMA. Also, the Relative Strength Index and the MACD indicators have pointed downwards.
The most likely scenario is where the stock bounces back and retests the lower side of the wedge and then resumes the downward trend. This pattern is known as a break and retest and is one of the most popular continuation signs.
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