SentinelOne (S) Q1 Earnings: What To Expect

SentinelOne (S) is set to report earnings tomorrow after market close, with analysts expecting revenue growth of 22.5% year-over-year to $228.2 million and adjusted earnings of $0.02 per share. The company's previous quarter saw a revenue beat but a miss on billings estimates, and full-year guidance indicates slowing revenue growth; peers Varonis and Qualys recently reported mixed results, with Varonis beating expectations and Qualys matching, contributing to positive investor sentiment in the cybersecurity segment, where share prices are up 7.3% on average over the last month.

Analysis

SentinelOne is set to report earnings with analysts anticipating $228.2 million in revenue, representing a 22.5% year-over-year growth, and adjusted earnings of $0.02 per share. This expected growth marks a slowdown from the 39.7% reported in the same quarter last year and follows a preceding quarter where revenues of $225.5 million (up 29.5% YoY) beat estimates by 1.4%, but the company significantly missed billings forecasts and issued guidance for decelerating full-year revenue growth. Despite these concerns and having missed revenue estimates twice in the last two years, SentinelOne expanded its large enterprise customer base, those paying over $100,000 annually, by 101 to reach 1,411. Analyst estimates have remained largely stable leading into the report, with an average price target of $24.53 compared to the current $19.80 share price. The stock has appreciated 7.3% in the past month, aligning with a similar average increase in the cybersecurity sector, though overall sentiment signals are mixed. Recent peer results offer varied context: Varonis reported 19.6% year-over-year revenue growth, beating expectations and seeing a 2.2% stock increase, while Qualys reported 9.7% revenue growth, also topping estimates, but its stock price remained unchanged.

Key Decisions for Investors

• Investors should critically examine SentinelOne's reported billings figures and its full-year revenue guidance, as these metrics were areas of concern last quarter and will be key indicators of its growth trajectory.
• Given the projected deceleration in year-over-year revenue growth and a history of two revenue misses in the last two years, alongside recent share price appreciation, investors should be prepared for potential volatility post-earnings and weigh the risk-reward given the current valuation against the $24.53 average analyst price target.
• Monitoring the continued growth in large enterprise customers (>$100k ARR) will be important, as this cohort is a significant driver for sustained revenue expansion; a slowdown here could signal increased competitive pressures or market saturation.