Shares in SentinelOne (S) fell after the cybersecurity firm reported fourth-quarter earnings and revenue that topped Wall Street estimates. Revenue guidance for SentinelOne stock met views while its operating margin outlook missed.
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The company reported January quarter earnings after the market close on Wednesday. SentinelOne recorded an adjusted loss of 2 cents a share vs. a 13-cent loss a year earlier.
"SentinelOne reported a solid set of quarterly results," said William Blair analyst Jonathan Ho in a report.
He added: "The company experienced strength from large deals and broad-based demand for its products across endpoint and emerging growth areas. The stock, however, is likely to open lower as SentinelOne's guidance was below consensus for revenue and pro forma operating margins. We believe the guidance is prudent and conservative given continued expectations for a challenging spending environment to persist through fiscal year 2025."
SentinelOne Stock: Q4 Revenue Beats
At Raymond James, analyst Adam Tindle said in a report: "Initial fiscal 2025 guidance was better than we feared on profitability, but not as robust on growth, and we would have preferred a higher weighting on incremental growth."
SentinelOne posted revenue of $174.2 million, up 38%. Further, SentinelOne stock analysts expected the Mountain View, Calif.-based company to report revenue of $169.4 million and a loss of 4 cents a share.
Also, SentinelOne said annualized recurring revenue from subscription-based services increased 39% to $724.4 million vs. estimates of $722.5 million.
For the current quarter ending in April, SentinelOne predicted revenue of $181 million, in-line with estimates. Full-year fiscal revenue guidance of $815 million was also in-line.
"Fiscal Q1 and fiscal 2025 operating margin guidance missed consensus due to M&A but we believe the long-term trajectory remains on track," said Jefferies analyst Joseph Gallo in a report.
At Susquehanna, analyst Shyam Patil said in a report: "For fiscal 2025, the revenue guide was a touch below consensus expectations, with profitability a bit further below. While the outlook was more conservative than Street expectations, we'd note that growth is still quite healthy at 31% year-over-year for fiscal 2025 (at the midpoint) and the platform expansion strategy is seeing solid results in the market."
SentinelOne Stock In IBD 50
On the stock market today, SentinelOne stock retreated 10.6% to 24.96 in early trading. SentinelOne stock ranked No. 16 in the IBD 50 roster of growth stocks.
Further, SentinelOne stock was up 2% this year prior to the earnings report. But SentinelOne stock has advanced 100% over the past year. It traded 9% below its 52-week high heading into the SentinelOne earnings report.
SentinelOne's software detects malware on laptops, mobile phones and other "endpoints" that access corporate networks. Also, it's building a broad, threat-detection cybersecurity platform.
Rivals include CrowdStrike Holdings (CRWD) and Microsoft (MSFT).
SentinelOne stock owns a Relative Strength Rating of 93 out of a best-possible 94, according toIBD Stock Check-up.
Follow Reinhardt Krause on X, formerly Twitter@reinhardtk_techfor updates on artificial intelligence, cybersecurity and cloud computing.
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