SentinelOne Stock Falls As Analysts Mull Guidance Amid Cybersecurity Firm's IPO


In its first earnings report as a public company, cybersecurity firm SentinelOne reported revenue growth above expectations, with adjusted profit in line with views. But S stock fell on Thursday as analysts mulled the company's outlook.

SentinelOne reported earnings after the market close on Wednesday. The cybersecurity firm said it lost 20 cents a share in the July quarter, in line with Wall Street estimates.

Revenue rose 121% to $45.8 million, topping estimates of $40.4 million, the company said.

Annual recurring revenue increased 127% to $198 million, including the acquisition of Scalyr, the company said. Analysts had estimated ARR of $186.4 million. The number of customers with ARR over $100,000 grew 140% year over year to more than 345.

For the October quarter, SentinelOne projected revenue of $49.5 million at the midpoint of its guidance. Analysts had estimated revenue of $45.7 million.

"Fiscal 2022 revenue guidance for 103% year-over-year growth implies new business ARR slows to 45% growth in the second half and declines in amount of revenue recognized," said Jefferies analyst Brent Thill in a report.

S Stock: IPO Lock-up Expires Sept. 28

SentinelOne stock fell 3.2% to close at 66.04 on the stock market today.

The SentinelOne initial public offering in late June raised $1.2 billion with shares priced at 35. The IPO lock-up period expires on Sept. 28, with potentially 40 million shares available for trading.

Shares in the cybersecurity firm hit an all-time high 73.47 on Tuesday. S stock fell 3.9% in Wednesday's regular session as the Nasdaq also retreated.

In addition, heading into the SentinelOne earnings report, S stock was extended from an IPO base entry of 54.15.

SentinelOne's cybersecurity software uses artificial intelligence. The software detects malware on laptops, mobile phones and other "endpoints" that access corporate networks.

Competition Intensifies With CrowdStrike

Meanwhile, its competitors include CrowdStrike Holdings. "SentinelOne is one of the top two vendors in the endpoint security market and is well-positioned to take share from both the legacy and next-generation vendors. The company has strong ties to the channel, which should augment further share gains," said Wells Fargo analyst Andrew Nowinski in a report.

If you're new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines.

IBD offers a broad range of growth stock lists, such as Leaderboard. Investors also can create watch lists to include issues like S stock, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

How This IBD Tool Simplifies The Search For Top Stocks

Find Compelling Growth Stocks With IBD's Stock Of The Day

Get A Free Trial Of IBD Leaderboard

Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

Chart Reading For Beginners: Nvidia, Amazon, Pinterest Reveal This Key Investing Skill

What is inkl?

Important stories

See news based on value, not advertising potential. Get the latest news from around the world.

Trusted newsrooms

We bring you reliable news from the world’s most experienced journalists in the most trusted newsrooms.

Ad-free reading

Read without interruptions, distractions or intrusions of privacy.