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After a headline-grabbing summer that included a global IT outage caused by CrowdStrike (CRWD), plus a massive data breach that leaked millions of Social Security numbers, cybersecurity stocks are emerging as a top focus area to watch for tech investors. While many enterprise software stocks have struggled in the face of tighter corporate IT budgets, and shifting priorities that have seen artificial intelligence (AI) spending shoot to the top in recent years, cybersecurity companies benefit from offering a defensive product within the software space - one that major corporations are unlikely to scale back on, even during periods of cost-cutting.
About SentinelOne Stock
Based in the tech hub of Mountain View, SentinelOne Inc. (S) is a cybersecurity firm that offers AI-powered protection. The company specializes in endpoint protection, and its primary offering is its Singularity platform, which provides a unified hub for enterprises to detect and respond to cybersecurity threats.
Valued at $7.85 billion, SentinelOne's customer list includes corporate heavyweights like Sysco (SYY), Lyft (LYFT), Samsung, ServiceNow (NOW), and Estee Lauder (EL).
The cybersecurity company provides its services across the United States and internationally and was incorporated in 2013, with its headquarters in Mountain View, California.
SentinelOne stock has underperformed the broader market, down 11% on a year to date basis. However, the stock sports a respectable 52-week gain of 47.4%.
SentinelOne Posts Solid Q2 Results
SentinelOne reported fiscal Q2 2025 earnings that narrowly topped expectations in late August, with revenue up 33.1% year over year to $198.9 million, edging past analysts' $197.4 million estimate. Annual recurring revenue (ARR) came in strong, rising more than 31% to $806 million.
Earnings for the quarter came to $0.01 per share, exceeding Wall Street’s break-even estimate. SentinelOne ended the quarter with cash and equivalents of $1.1 billion.
“We achieved a significant profitability milestone, our first-ever quarter of positive net income and earnings per share,” noted Tomer Weingarten, CEO of SentinelOne. “In addition, our Q2 net new ARR outperformed our expectation by a double-digit percentage, and we continue to expect new business growth trends to improve in the second half of the year. Based on our business and go-to-market momentum, we're also raising our revenue guidance for fiscal year '25.”
Management expects Q3 revenue of $209.5 million, with full-year revenue expected to reach $815 million. That compares to Wall Street's consensus estimates for Q3 and full-year revenue of $209.73 million and $813.71 million, respectively.
What's the Analyst Forecast for SentinelOne Stock?
Analysts are bullish on the cybersecurity stock, which has a consensus “Moderate Buy” rating and a mean price target of $28.35 - reflecting expected upside potential of 16.2% from Friday's close.
Last week, Wells Fargo (WFC) analyst Andrew Nowinski backed his “Overweight” rating on SentinelOne, citing its recent deal with Lenovo (LNVGY) to include SentinelOne’s software and generative AI solutions on all new Lenovo PCs. Nowinski expects the partnership to give a significant boost to SentinelOne’s ARR over the next 12 months.
"While it may take 12 months to have an impact, we believe this partnership should have a meaningful impact on SentinelOne’s ARR, given that Lenovo is the top PC manufacturer," wrote the analyst, who set a $30 price target for SentinelOne shares. That suggests the stock could rise about 23% in the next year.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
