SentinelOne Likely For Customer Deceleration Akin To Okta And CrowdStrike, Analyst Says

  • Needham analyst Alex Henderson reiterated Buy on SentinelOne, Inc S with a $28 price target.
  • Slowing growth at Sentinel on macro pressures may be just what the stock needs. 
  • Henderson expects slower growth accompanied by tighter spending and more rapid improvement in Operating Margins. 
  • Sentinel will see a similar deceleration in the low end of its customer base, as cited by Okta, Inc OKTA and CrowdStrike Holdings, Inc CRWD
  • Sentinel will come in relatively in line to even a bit ahead on FY3Q but expect its guidance for FY4Q to factor in the eroding conditions., Henderson writes in the analyst note. 
  • Like Crowd, Henderson does not expect S-One to assume a significant budget flush in CY4Q, resulting in caution guidance for the quarter and no guidance for FY24. 
  • As conditions get more brutal, Sentinel would downshift growth expectations and staffing builds, which should allow upside to EPS even as the company decelerates.
  • Price Action: S shares traded lower by 3.65% at $14.24 on the last check Monday.
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