Buy Low Spotlight: SentinelOne

The explosion of artificial intelligence (AI) is creating new challenges and opportunities in the realm of cybersecurity. Cybercrime is projected to cost the world a staggering $9.5 trillion in 2024. Yet, current corporate spending on cybersecurity, estimated at $213 billion, is a fraction of the $2 trillion that experts suggest is required. SentinelOne, a cybersecurity company that leverages AI in its products, is well-positioned to capitalize on this growing demand. Cybercriminals are now using generative AI to attack companies. SentinelOne’s AI-empowered holistic and preventative approach to cyberattacks enables faster reaction times to these threats. Smaller than its rivals, SentinelOne has a greater opportunity for high growth rates.

What Sets Them Apart?

With AI at the core of its cybersecurity products, SentinelOne offers two ways to anticipate and fight cybercrime. Its Singularity platform offers a comprehensive solution for cloud, endpoint, and identity protection. It uses AI-powered technology to track security events across the enterprise and provide actionable insights to security managers. SentinelOne's Purple AI virtual assistant addresses the challenge of alert fatigue. Security teams can efficiently manage and respond to threats by answering questions, investigating specific issues, and proactively scanning for new risks. Although still small, the company has cash reserves of $926 million and the potential for long-term growth, making it an attractive investment opportunity.

By The Numbers

SentinelOne's growth outpaces its competitors, with a 38% year-over-year revenue increase in the latest quarter, surpassing the growth rates of industry giants like Palo Alto Networks and CrowdStrike. Although still operating at a loss, SentinelOne is trading at 71% below its peak valuation. Based on its $621 million in revenue for FY 2024 and its current market capitalization of $6.6 billion, SentinelOne shares are trading at a price-to-sales (P/S) ratio of 10.6. In comparison, CrowdStrike is trading at a P/S ratio of 26.6, making it 2.5 times more expensive. Palo Alto's P/S ratio of 13.4 is also higher despite SentinelOne's revenue growing at twice the rate. Analysts recommend investing in SentinelOne stock now and holding it for ten years. This should give the corporate sector time to boost cybersecurity spending to address looming AI security threats.

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