Dj Sentinelone Price Target Cut To $23.00/Share From $26.00 By Canaccord Genuity

Reuters

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Dj Sentinelone's Solid 3Q Overshadowed By Sudden Cfo Exit - Market Talk

Reuters

SentinelOne

-14.20%

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SentinelOne's Solid 3Q Overshadowed by Sudden CFO Exit — Market Talk

Dow Jones Newswires

SentinelOne

-14.20%

SentinelOne's solid 3Q earnings are likely to be overshadowed by CFO Barbara Larson's sudden exit in the new year, analysts say. The move "comes as a surprise with Ms. Larson having joined just over a year ago, and as the company has started to exhibit more consistent execution and profitability," Deutsche Bank's Brad Zelnick writes in a note. Oppenheimer analysts say Larson's departure makes them "incrementally cautious" on the company's FY27 outlook, despite signs of strength in the earnings and management saying her exit is unrelated to the outlook. Shares are down 14%. (elias.schisgall@wsj.com)

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Why SentinelOne (S) Stock Is Falling Today

Stock Story

What Happened?

Shares of cybersecurity AI platform provider SentinelOne fell 13.1% in the afternoon session after the company's fourth-quarter revenue guidance overshadowed its third-quarter earnings beat.

While the company topped Wall Street's expectations for the third quarter, reporting revenue of $258.9 million and an adjusted profit of $0.07 per share, its outlook for the upcoming quarter raised concerns among investors. SentinelOne projected its fourth-quarter revenue would be $271 million, which fell below the $273.2 million analysts had predicted. This weaker-than-expected forecast suggested a potential slowdown in growth, prompting a negative reaction in the market despite the otherwise solid quarterly performance. The guidance miss was the key factor driving the stock's decline.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy SentinelOne? Access our full analysis report here.

What Is The Market Telling Us

SentinelOne’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for SentinelOne and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 15 days ago when the stock dropped 2.6% on the news that markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts.

While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%.This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment.

Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.

SentinelOne is down 35.2% since the beginning of the year, and at $14.63 per share, it is trading 43.3% below its 52-week high of $25.78 from December 2024. Investors who bought $1,000 worth of SentinelOne’s shares at the IPO in June 2021 would now be looking at an investment worth $344.12.

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SentinelOne Q3 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Fall

Zacks

SentinelOne

-14.20%

SentinelOne S reported third-quarter fiscal 2026 earnings of 7 cents per share, which surpassed the Zacks Consensus Estimate by 40%. The company reported break-even results in the year-ago quarter.

Revenues were $258.9 million, up 23% year over year and beat the consensus mark by 1.14%. Roughly 50% of the quarter’s bookings were generated from emerging products, supported by the triple-digit growth of Singularity Data.

As of Oct. 31, 2025, annualized recurring revenues (ARR) grew 23% year over year to $1.06 billion. Customers with above $100,000 or more in ARR grew 20% year over year to 1,572 as of the same date, driven by continued momentum in business generation and expansion with existing customers.

SentinelOne’s shares moved down 11.62% at the time of writing this article. The company’s shares have plunged 34.1% in the past year against the Zacks Computer & Technology sector’s rise of 25.1%.

SentinelOne’s Operating Highlights

Adjusted gross profit in the reported quarter was 78.5%, which contracted roughly 90 bps year over year.

SentinelOne, Inc. Price, Consensus and EPS Surprise

SentinelOne, Inc. price-consensus-eps-surprise-chart | SentinelOne, Inc. Quote

Total operating expenses of $185.6 million increased 4.1% year over year due to elevated research and development (up 21.4% year over year), offset by lower sales and marketing (down 1.9% year over year), and lower general and administrative expenses (down 2.3% year over year).

Non-GAAP operating income was $17.7 million against a non-GAAP loss of $10.7 million in the year-ago quarter.

SentinelOne’s Balance Sheet Remains Strong

As of Oct. 31, 2025, SentinelOne had cash, cash equivalents and investments of $873.6 million.

The free cash flow was $15.9 million compared with the free cash burn of $12.7 million reported in the year-ago quarter.

S Offers Q4 & FY26 Guidance

For fourth-quarter fiscal 2026, SentinelOne expects revenues of $271 million, indicating year-over-year growth of 20.2%.

The non-GAAP gross margin is expected to be 77.5%. The company expects the adjusted operating margin to be 5%, suggesting a year-over-year improvement of 400 basis points.

For fiscal 2026, revenues are forecast to be $1 billion. The adjusted gross margin is expected to be 78.5% for fiscal 2026.

For fiscal 2026, the company expects the adjusted operating margin to be 3%.

SentinelOne’s Zacks Rank & Stocks to Consider

Currently, SentinelOne carries a Zacks Rank #3 (Hold).

Advanced Energy Industries AEIS, Digital Turbine APPS and Amphenol APH are some better-ranked companies that investors can consider in the broader Zacks Computer & Technology sector. These three companies sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Energy Industries' shares have soared 85.6% year to date. The Zacks Consensus Estimate for Advanced Energy Industries' 2025 earnings is pegged at $6.23 per share, up 9.7% over the past 30 days, implying growth of 67.92% from the year-ago quarter’s reported figure.

Digital Turbine shares have skyrocketed 200.6% year to date. The Zacks Consensus Estimate for APPS’ 2026 earnings is pegged at 33 cents per share, down four cents in the past 30 days. Digital Turbine reported earnings of 35 cents per share in fiscal 2025

Amphenol shares have surged 100.8% year to date. The Zacks Consensus Estimate for Amphenol’s 2025 earnings has increased 2.2% to $3.29 per share in the past 30 days, indicating year-over-year growth of 74.07%.

This article originally published on Zacks Investment Research (zacks.com).

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