To The Moon

$SentinelOne, Inc(S)$ is slated to reveal its earnings on 04 December 2024. SentinelOne is forecasted to report an EPS of $0.01, showcasing a 133.33% upward movement from the corresponding quarter of the prior year.

Consensus estimate for the revenue is anticipated to be $209.56 million, indicating a 27.65% upward movement from the same quarter last year.

Investors In-Line Revenue Guidance Matters For CyberSecurity stocks.

The most recent earnings from SentinelOne peer, $Zscaler Inc.(ZS)$ reported quarterly earnings of $0.77 per share which beat the analyst consensus estimate of $0.63 by 22.22 percent. This is a 14.93 percent increase over earnings of $0.67 per share from the same period last year. The company reported quarterly sales of $628.00 million which beat the analyst consensus estimate of $606.19 million by 3.60 percent. This is a 26.43 percent increase over sales of $496.70 million the same period last year.

Zscaler stock tumbled Monday after the cybersecurity firm reported fiscal first-quarter earnings, revenue and billings that beat estimates. But Zscaler's in-line revenue guidance underwhelmed investors.

Same thing happened to $CrowdStrike Holdings, Inc.(CRWD)$ , its share price was down after results beat expectations and management raised its full-year guidance. But it did not raise guidance as much as investors had hoped.

So the guidance that investors are looking does have an effect on the stock price of cybersecurity stocks, and

Why SentinelOne Singularity platform Could Be A Winner

One of the most significant trends in the future of cyber security is the consolidation of security tools and services. By integrating various security functions into a single platform, businesses can achieve a more streamlined and efficient approach to protecting their digital assets. Consolidation offers several key benefits:

• Improved Efficiency

• Enhanced Visibility

• Cost Savings

SentinelOne Singularity is a cloud-based platform that consolidates an enterprise's cybersecurity tools into a single place: 

• Centralized: Combines endpoint protection (EPP), endpoint detection and response (EDR), IoT security, and cloud workload protection (CWPP) into one platform 

• AI-driven: Uses machine learning to make decisions and respond to threats 

• Automated: Can remediate endpoints without human intervention 

• Scalable: Pricing is based on the number of agents, so businesses can scale up as they grow

So as we have already seen Artificial intelligence (AI) being mentioned in most if not all the earnings in recent times, Artificial intelligence (AI) and machine learning (ML) are playing an increasingly important role in the future of cyber security. These technologies can analyse vast amounts of data to identify patterns and anomalies that may indicate a cyber threat. By leveraging AI and ML, businesses can enhance their threat detection capabilities and respond to incidents more quickly and effectively.

So I think what we need to look out for is the revenue contribution from SentinelOne Singularity platform. The Singularity platform is being widely adopted, and the company's earnings have beaten the Zacks Consensus Estimate in the last four quarters. 

• Partnerships :

  SentinelOne has partnered with Lenovo to embed the Singularity platform in new PC shipments. This partnership is expected to expand the platform's market presence. 

• Expansion into new markets :

  SentinelOne is expanding the Singularity platform into new markets, including Singularity Cloud and Singularity Data Lake

image taken from SentinelOne website

SentinelOne ARR To Watch As Adoption For Singularity Increase

SentinelOne's annualized recurring revenues (ARR) increased 32% year over year to $806 million in the second quarter of fiscal 2025. The company experienced strong momentum among large enterprises, with customers generating Annual Recurring Revenue (ARR) of more than $100K, which rose 24% year over year to 1,233.

Based on how SentinelOne peers earnings have come out, we could be seeing as businesses look to consolidate their cyber security tools, it is essential to choose vendor-neutral solutions. Vendor-neutral platforms offer greater flexibility and interoperability, allowing businesses to integrate the best tools and technologies from various providers. This approach ensures that businesses can adapt to the ever-changing threat landscape without being locked into a single vendor’s ecosystem.

With the partnership flexibility to have this solution embedded into OEM manufacturer, this might help to increase the ARR as each machine sold would need a subscription.

Technical Analysis - MACD and Multi-timeframe (MTF)

If we looked at how SentinelOne have been trading recently, we could see a small consolidation forming but we just saw a slight decline to the downside, but it is still trading above the short-term and long-term MA period.

I would be monitoring the price action because MACD is indecisive as it is preparing for a potential reversal, and MTF is also not giving any signal for a clear upward trend.

But I believe SentinelOne might be able to surprise investors with a better guidance which should sit well with investors expectations.

Summary

I would think that SentinelOne Singularity platform helps customers to have a consolidation of the security tools and services, this would allow the operation center to spend less time in catching, and mre time in analysing any threats.

This is something that would reduce cost and improve efficiency, so I have confidence that SentinelOne should be able to enjoy a significant increase in their ARR.

Appreciate if you could share your thoughts in the comment section whether you think SentinelOne would surprise with a better-than-expected earnings and also guidance that sits well with investors expectations.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.