ZACKSยท2025-08-22 17:16Core Insights - Okta and SentinelOne are significant players in the enterprise security software market, with Okta focusing on cloud-based identity solutions and SentinelOne on endpoint security and threat detection [1][2] Industry Overview - Gartner projects enterprise spending on cybersecurity software and network security to grow by 14% in 2025, reaching $118.5 billion, driven by demand for Generative AI and cloud adoption [2] - IDC anticipates global cybersecurity spending to increase by 12.2% year-over-year in 2025, with security software spending expected to grow by 14.4% year-over-year [2] Okta's Performance - Okta's innovative portfolio includes AI-powered capabilities and a strong demand for new products, leading to a customer base of approximately 20,000 as of Q1 FY26 [4][6] - The company has over 7,000 integrations with various applications and IT infrastructure providers [4] - Subscription revenue for Q2 FY26 is estimated at $697 million, reflecting a 10.3% growth from the previous year [7] - Okta's shares have appreciated by 16.5% year-to-date, outperforming SentinelOne [13] SentinelOne's Performance - SentinelOne's Singularity platform offers comprehensive security solutions, with significant growth driven by its AI and automation capabilities [8] - The Purple AI component saw triple-digit quarterly bookings growth year-over-year in Q1 FY26, with an attach rate exceeding 25% [9] - The company is in the process of acquiring Prompt Security to enhance its AI-native platform [10] - SentinelOne's shares have declined by 23.9% year-to-date [13] Valuation and Market Position - Okta's forward 12-month Price/Sales ratio is 5.22X, while SentinelOne's is lower at 4.99X [17] - Both companies are considered overvalued, with Okta holding a Zacks Rank 3 (Hold) and SentinelOne a Zacks Rank 4 (Sell) [16][21]