SentinelOne Stock Down 14% in a Month: Hold Tight or Time to Let Go?

SentinelOne S shares have plunged 14% in the past month, underperforming the broader Zacks Computer & Technology sector’s return of 3% and the Zacks Security industry’s decline of 12.1%. The underperformance can be attributed to challenging macroeconomic conditions, which have led to elongated sales cycles as certain customers paused their spending decisions, impacting net new ARR growth.

S Stock's Performance

However, SentinelOne’s long-term growth trajectory remains intact, driven by an innovative portfolio.  The company’s Singularity platform is a complete AI-native platform that provides security at multiple levels, including endpoint, cloud, identity, and data through a single interface. Singularity’s popularity, driven by SentinelOne’s AI and automation-driven approach, is driving top-line growth. 

So, is SentinelOne’s Singularity platform a catalyst for recovery after the stock drop? Let’s dig deep to find out.

S Benefits From Expanding Portfolio

SentinelOne is benefiting from strong adoption of its AI-powered cybersecurity solutions. In the first-quarter fiscal 2026, Purple AI, a key component of the Singularity platform, saw triple-digit quarterly bookings growth on a year-over-year basis, reflecting growing adoption. The company achieved an attach rate that exceeded 25% across subscriptions sold in the reported quarter.

The company’s innovative product pipeline has been a key catalyst. In the first quarter of fiscal 2026, SentinelOne launched Purple AI Athena, the industry’s first true end-to-end Agentic AI platform for cybersecurity.  

S also announced that Singularity Hyperautomation is now generally available. The solution allows enterprises to execute novel detection rules autonomously, reducing manual operations and improving efficiency. 

Acquisitions have also played an important role in expanding SentinelOne’s portfolio. The company recently announced a definitive agreement to acquire Prompt Security, expanding its AI-native Singularity Platform to secure generative and agentic AI use in the enterprise by preventing prompt injection, data leakage, and misuse in real time.

SentinelOne Rides on a Rich Partner Base

S continues to enhance platform functionality and Singularity modules that are attracting customers. Its expanding partner base, which includes Amazon AMZN, CyberArk CYBR, Mimecast, and Lenovo, has been noteworthy.

In July 2025, SentinelOne announced the availability of Singularity Cloud Security and Singularity AI SIEM, including Purple AI, in the new AI Agents and Tools category in Amazon’s cloud computing platform, Amazon Web Services (AWS) Marketplace, enabling faster deployment of end-to-end AI-powered security solutions.

In June, the company also announced that it has joined the Amazon Web Services Independent Software Vendor Workload Migration Program to accelerate secure cloud migrations with its AI-powered Singularity Cloud Security platform.

SentinelOne’s integration with CyberArk enhances endpoint security and privileged access protection, leveraging CyberArk’s identity data to strengthen AI-driven threat detection and response.

SentinelOne’s annualized recurring revenues (ARR) increased 24% year over year to $948.1 million in the first quarter of fiscal 2026. The company experienced strong momentum among large enterprises, with customers generating Annual Recurring Revenue (ARR) of more than $100K, which rose 22% year over year to 1,459.

S 2Q25 Earnings Estimates Revisions Are Steady

SentinelOne’s strong portfolio and partner base are contributing to its growth prospects continuously, thereby driving top-line growth.

The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is currently pegged at 3 cents per share, which has remained unchanged over the past 30 days. This indicates a 200% increase year over year.

SentinelOne, Inc. Price and Consensus

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

The company expects fiscal second-quarter revenues to be about $242 million, reflecting 21.7% year-over-year growth.

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $242.02 million, suggesting 21.65% growth year over year.

SentinelOne Suffers From Stiff Competition

Despite a strong portfolio and expanding partner base, SentinelOne is facing stiff competition in the cybersecurity industry, particularly from large, well-established players like CrowdStrike CRWD, Carbon Black, Microsoft, and many more.

CrowdStrike provides its cybersecurity services mainly through its Falcon platform. The company recently launched CrowdStrike Falcon Next-Gen Identity Security, a unified AI-native solution that protects human, non-human, and AI agent identities across hybrid environments to stop identity-driven breaches.

Conclusion: Time to Let Go of SentinelOne Stock

SentinelOne’s strong portfolio, which leverages AI and a strong partner base, is a positive. 

However, S shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend.

S Shares Trade Below 50-Day & 200-Day SMAs

SentinelOne is also suffering from a challenging macroeconomic condition and stiff competition in the cybersecurity market.

The company is expected to suffer from uncertainty around federal budget allocation and spending rates. Although the company is benefiting from its growing presence in the federal space, varying deal times are expected to hurt top-line growth in the near term. This makes the stock risky for investors.

SentinelOne currently has a Zacks Rank #4 (Sell), which implies that investors should avoid investing in this stock at the moment. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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