SentinelOne Stock Slips As Analysts Cut Price Forecasts On Soft Guidance, ARR Miss, Product Retirement

Core Viewpoint - SentinelOne's fourth-quarter results exceeded revenue expectations but fell short in annual recurring revenue (ARR) guidance, leading to multiple price target reductions from analysts [1][5][10]. Financial Performance - Fourth-quarter revenue was reported at $225.5 million, a 29% increase year-over-year, surpassing the consensus estimate of $222.25 million [1][7]. - Adjusted earnings per share (EPS) for the fourth quarter were four cents, beating the estimate of one cent [1]. - Annual recurring revenue (ARR) reached $920.1 million, reflecting a 27% growth, although it slightly missed consensus expectations [5][8]. Guidance and Analyst Reactions - For the first quarter, SentinelOne expects revenue of approximately $228 million, which is below the consensus estimate of $235.18 million [2][6]. - Fiscal 2026 guidance for ARR is projected between $1.007 billion and $1.012 billion, falling short of the street expectation of $1.026 billion [8]. - Analysts from Scotiabank and Needham have lowered their price targets for SentinelOne, with Scotiabank reducing it from $26 to $19 and Needham from $32 to $23 [2][3]. Product Developments - The company is retiring its legacy Deception product, which is expected to negatively impact ARR by approximately $10 million in fiscal 2026 [4][10]. - Despite the challenges, operating margin profitability turned positive for the first time this quarter, with expectations for continued improvement in fiscal 2026 [4][9]. Market Sentiment - Following the announcement of results and guidance, SentinelOne's stock price fell by 3.47% to $18.63 [12]. - Analysts noted strong customer traction and pipeline strength, but the stock's decline reflects concerns over weaker-than-expected results and guidance [11].