SentinelOne’s S shares have surged 54.8% in the past year, outperforming the Zacks IT Services industry’s increase of 20.9% and the broader Zacks Computer & Technology sector’s 32.9% growth.

The outperformance can be attributed to the continued adoption of its AI-powered security solutions, expansion into new markets, particularly in the cloud and data security sectors, and strong customer retention and growth.

In the second quarter of fiscal 2025, revenues jumped 33% year over year to $199 million, driven by the expansion in clientele. 

The company is riding on strong demand for its Cloud Security and Data Lake solutions, with Singularity Cloud emerging as its most rapidly expanding solution.

SentinelOne, Inc. Price and Consensus

SentinelOne, Inc. price-consensus-chart | SentinelOne, Inc. Quote

SentinelOne’s annualized recurring revenues (ARR) increased 32% year over year to $806 million in the second quarter of fiscal 2025. The company experienced strong momentum among large enterprises, with customers generating Annual Recurring Revenue (ARR) of more than $100K, which rose 24% year over year to 1,233.

SentinelOne Benefits From Strong Partner Base

SentinelOne’s expanding partner base, which includes Alphabet GOOGL cloud business, Google Cloud, Amazon AMZN cloud computing platform, AWS, and Lenovo LNVGY has been a major growth driver.

In the second quarter of fiscal 2025, SentinelOne and Alphabet’s Google Cloud announced a strengthened partnership. Per the terms, GOOGL integrated SentinelOne’s AI-driven endpoint protection with Google Cloud’s threat intelligence to enhance enterprise cyber defense.

In October, SentinelOne announced an extended collaboration with Amazon Web Services to enhance its Purple AI cybersecurity platform with generative AI powered by Amazon Bedrock and to expand its Singularity Platform on AWS Marketplace.

In September, SentinelOne and Lenovo announced a multi-year collaboration to integrate SentinelOne’s AI-powered Singularity Platform into Lenovo devices, enhancing endpoint security and introducing a new Managed Detection and Response service.

The company’s expanding portfolio has been noteworthy. In the second quarter of fiscal 2025, its Singularity platform continued to drive innovation in AI-powered security, with enhanced capabilities in areas like AI-SIEM (Security Information and Event Management), cloud security, and CNAPP (Cloud-Native Application Protection Platforms).  

The integration of AI technologies like Purple AI helped reduce investigation times and improved threat detection, gaining strong approval from both existing and new customers.

SentinelOne Offers Strong Q3 Guidance

For third-quarter fiscal 2025, SentinelOne expects revenues of $209.5 million, indicating growth of nearly 28% year over year.

The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is pegged at $209.56 million, indicating 27.65% year-over-year growth.

The Zacks Consensus Estimate for earnings is pegged at 1 cent per share, unchanged in the past 30 days.

What Investors Should Do With SentinelOne Stock?

SentinelOne’s efforts to expand its portfolio and strengthen its partner base have been commendable, but these efforts are currently overshadowed by challenging macroeconomic conditions and tighter financial conditions. 

High interest rates and ongoing inflation are continuing to negatively influence enterprise spending, making it more difficult for businesses to invest in cybersecurity solutions.

SentinelOne is also facing stiff competition in the cybersecurity industry, particularly from large, well-established players like Microsoft and CrowdStrike.

SentinelOne stock is not so cheap, as the Value Style Score of F suggests a stretched valuation at this moment.

S currently carries Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at present. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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