Sentinelone Inc. Cl A
Sentinelone Inc. Cl A
IBD Stock Analysis
- After an initial ramp-up, stocks fell back to their initial public offering
- Stocks cannot be bought now, but stocks can prepare for a move
- The composite score is an average of 58, but the relative strength score is 91
Classification of industrial groups
Basis of IPO
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2:12 p.m. EDT on
SentinelOne (S) is less known to investors than, say, its biggest rival CrowdStrike Holdings (CRWD). But the SentinelOne action, the IBD Stock of the Day, has the same roots in the endpoint security market.
It also uses artificial intelligence in its security software to detect malware on laptops, cell phones and other “endpoints” that access corporate networks.
And like CrowdStrike, Mountain View, California-based SentinelOne is evolving as a business amid the ransomware epidemic. It creates vast cybersecurity threat detection platforms.
Called XDR, or Extended Detection and Response, cybersecurity technology monitors and analyzes endpoints as well as web / email gateways, web application firewalls, cloud workloads, and IT infrastructure. Additionally, XDR uses automated tools to collect network incident data, also known as telemetry, to identify signals of malicious activity.
SentinelOne Stock focuses on threat detection
SentinelOne’s initial public offering took place on June 30, with shares priced at 35. SentinelOne’s IPO raised $ 1.2 billion, giving it ammunition for acquisitions that could expand its cybersecurity offerings.
SentinelOne stock hit a record 73.47 on September 7, then fell back to form its Basis of IPO. SentinelOne stock is not yet in a buy zone, although it may relocate. But investors should wait and see if that forms a handful that would provide a access point. With less than a handful, the buy point is 73.57. Shares closed slightly higher on Thursday at 64.01.
Cowen analyst Shaul Eyal, in a July indoctrination on SentinelOne stock, said the valuation of its IPO was mostly tied to the terminal market, not XDR’s bigger opportunity and ransomware.
“SentinelOne and CrowdStrike are both great examples for the XDR / EDR markets as they are direct competitors in this space,” he said. “We do not believe that SentinelOne has fully exploited the potential of its target markets. SentinelOne’s XDR data opportunity hasn’t even scratched the surface yet as it was not included in the disclosed TAM (Total Addressable Market) projection. “
Ransomware attacks on the rise
High-profile ransomware incidents have involved Solar winds (SWI), Colonial Pipeline, meat producer JBS and Kaseya.
In ransomware attacks, hackers take control of an organization’s computer system and data by installing malware. They lock down a victim’s computers with data encryption software.
SentinelOne isn’t the only cybersecurity company to jump into XDR.
SentinelOne Stock: taking market share from incumbents
“SentinelOne can generate revenue growth for the foreseeable future simply by continuing to take shares from existing endpoint security providers (McAfee, Symantec / Broadcom, Trend Micro),” said Andrew Nowinski, analyst at Wells Fargo, in a commentary. report to customers. “Its platform also compares well with other vendors that offer more of a next-generation platform, including VMware and Microsoft. “
While SentinelOne focuses on small and medium businesses, it plans to enter the enterprise market.
UBS analyst Roger Boyd said in his note to clients: “The growing focus on the business is likely to lead to operational challenges, more competitive break-ins and longer sales cycles.”
SentinelOne share not yet generating profits
In addition, SentinelOne stock lost 20 cents per share in the July quarter, according to Wall Street estimates. Revenue rose 121% to $ 45.8 million, beating estimates of $ 40.4 million.
In addition, annual recurring revenue increased 127% to $ 198 million, including the acquisition of Scalyr, the company said. Analysts had estimated the ARR at $ 186.4 million.
For the October quarter, SentinelOne forecasted revenue of $ 49.5 million in the middle of its forecast. Analysts had estimated revenue at $ 45.7 million.
Cybersecurity actions belong to the IBD Computer-Software Security group. In addition, it ranks 9th out of 197 industrial groups followed.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.