SentinelOne crashes 37% after cutting guidance; several analysts downgrade stock

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SentinelOne crashes 37% after cutting guidance; several analysts downgrade stock

SentinelOne (NYSE: S ) stock traded as much as 37% lower in pre-open Friday after the cybersecurity company slashed its full-year guidance.

SentinelOne reported an adjusted loss per share of $0.15 on revenue of $133.4 million. Analysts were looking for a loss per share of $0.17 on revenue of $136.6M. The company also reported an annual recurring revenue of $563.6M, easily below the estimate of $596M.

“Macroeconomic pressures continue to impact deal sizes, sales cycles, and pipeline conversion rates,” management wrote in a letter to shareholders.

For this quarter, SentinelOne sees revenue of $141M, missing the $151.9M analyst target. For a full 2024 year, revenue is seen in the range of $590-600M, lower than the previous $631-640M forecast.

Wall Street was expecting a full-year sales forecast of $638.5M.

Several analysts cut their recommendation on SentinelOne shares after the results. BTIG analysts downgraded the stock to Neutral as Q1 results are “too hard to defend.”

“At just over 5.0x ’24E EV/sales on our newly revised estimates, valuation is very reasonable for what should be a 30% growth story. But we need to see a couple of quarters of stable execution to gain more confidence in trend lines. And, unfortunately, we feel a Neutral rating is more appropriate at this point in time,” they said in a note.

Canaccord Genuity analysts also downgraded S shares.

“Given the slower growth rate and large ongoing operating losses combined with the accounting change, we are moving to the sidelines and downgrade to HOLD,” they said in a note to clients.

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