SentinelOne gapped up and broke out of a consolidation in a post-earnings rally Thursday as it surged past a 21.95 buy point. So now S stock is today's selection for IBD 50 Stocks To Watch.
The security software maker has surged a hefty 57% this year, far outpacing the S&P 500's 19% climb. Its relative strength line is at a fresh high as well, as seen in the blue dot on its IBD MarketSmith chart.
The company reported late Wednesday that third-quarter sales grew 42% to $164.2 million while a loss of 3 cents per share was an improvement from the 16-cent loss posted a year ago.
Annual recurring revenue grew 43% to $663.9 million. And its gross margin of 79% was a record as the company seeks to become profitable. Gross margins also were within the company's longer term target of 75% to 80%.
For the fourth quarter, the company gave a sales outlook of $169 million that suggests a 34% increase from the prior-year quarter.
S Stock: High Technical Ratings
SentinelOne went public on June 30, 2021, and listed on the New York Stock Exchange for an initial public offering at 35. Shares popped 30% on the first day of trading and reached an all-time high 78.53 on Nov. 12, 2021.
The stock has a Composite Rating of 94 out of a best-possible 99, though its EPS Rating lags at 62. But its Relative Strength Rating is nearly ideal at 97. SentinelOne belongs to the enterprise security software group. That group ranked 28th among IBD's 197 industry groups three weeks ago, but now sits in 7th place.
SentinelOne provides security software for enterprises. Its automation features allow AI-driven prevention, detection and response to cybersecurity threats. Further, the software works across the enterprise systems, cloud and devices collectively known as the Internet of Things.
High Institutional Ownership
The company offers subscription contracts to managed service providers, managed detection and response companies as well as original equipment manufacturers.
Mutual funds own 54% of outstanding shares. Also, more funds have been net buyers over the past seven quarters, giving the stock a strong Accumulation/Distribution Rating of B.
Exchange traded funds hold shares of the cybersecurity company as well. The First Trust Nasdaq Cybersecurity ETF and the iShares Expanded Tech Software Sector ETF hold shares of SentinelOne.
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