Why SentinelOne (S) Stock Is Nosediving

What Happened?

Shares of cybersecurity AI platform provider SentinelOne (NYSE:S) fell 5.7% in the afternoon session after Goldman Sachs lowered its price target on the company's stock. The firm reduced its target to $16.50 from $19.00 but kept its Neutral rating. 

This move followed a pattern of cautious analyst updates. For instance, Citigroup had previously cut its price target to $18.00 from $20.00. Additionally, Piper Sandler had downgraded its rating on the stock from Overweight to Neutral and lowered its price target. The negative sentiment occurred amid a broader difficult period for software stocks, with many cybersecurity companies, including SentinelOne, having lost value over the previous year.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free.

What Is The Market Telling Us

SentinelOne’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 13.1% on the news that the company's fourth-quarter revenue guidance overshadowed its third-quarter earnings beat. 

While the company topped Wall Street's expectations for the third quarter, reporting revenue of $258.9 million and an adjusted profit of $0.07 per share, its outlook for the upcoming quarter raised concerns among investors. SentinelOne projected its fourth-quarter revenue would be $271 million, which fell below the $273.2 million analysts had predicted. This weaker-than-expected forecast suggested a potential slowdown in growth, prompting a negative reaction in the market despite the otherwise solid quarterly performance. The guidance miss was the key factor driving the stock's decline.

SentinelOne is down 3.9% since the beginning of the year, and at $14.07 per share, it is trading 43.7% below its 52-week high of $24.97 from February 2025. Investors who bought $1,000 worth of SentinelOne’s shares at the IPO in June 2021 would now be looking at an investment worth $330.94.

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