SentinelOne Dips 10% YTD: Should You Buy, Sell or Hold the Stock?

Core Viewpoint - SentinelOne's stock has underperformed compared to its industry peers and broader market, with a year-to-date decline of 9.9% against a 10.3% increase in the Zacks Security industry and a 5.6% drop in the Zacks Computer & Technology sector [1] Group 1: Stock Performance - SentinelOne's stock has underperformed relative to peers such as Okta, Fortinet, and CrowdStrike, which have seen appreciations of 45.6%, 10.3%, and 7.6% respectively [1] - The stock is currently considered overvalued, with a Value Score of F and a forward 12-month Price/Sales ratio of 6.19X, compared to the sector's 5.88X [4] Group 2: Revenue Guidance and Growth - For fiscal 2026, SentinelOne expects revenues between $1.007 billion and $1.012 billion, indicating a 23% year-over-year growth at the midpoint, which is slower than the 32% growth reported in fiscal 2025 [7] - The first quarter of fiscal 2026 is projected to generate revenues of $228 million [7] Group 3: Innovative Portfolio and Market Potential - SentinelOne's innovative portfolio, including the Singularity platform, is designed to unify data capabilities and AI-powered security across various domains [8] - The total addressable market for SentinelOne's solutions is substantial, with segments like Endpoint Security, Data Analytics, Cloud Security, and Generative AI Security valued at $17 billion, $31 billion, $12 billion, and $3 billion respectively [9] Group 4: Strategic Partnerships and Integrations - The company has a strong partner base, including major players like Alphabet, Lenovo, Amazon, and ServiceNow, which aids in customer acquisition [12] - SentinelOne has enhanced its integration with Amazon Web Services, particularly with Purple AI, which is now available through Amazon Bedrock [13] Group 5: Earnings Estimates and Performance - The Zacks Consensus Estimate for fiscal 2026 earnings is 18 cents per share, unchanged from the previous 30 days, compared to 5 cents per share reported in fiscal 2025 [15] - The company has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 125.00% [16] Group 6: Market Sentiment and Stock Trends - Despite a strong portfolio and partner base, SentinelOne's shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend [18][20] - Current macroeconomic conditions and valuation concerns suggest that it may be prudent for investors to wait for a more favorable time to accumulate the stock [22]