SentinelOne's Revenue Surge And AI Product Potential Catch Attention, Analysts Elevate Price Targets And EPS Estimates

Analysts raised the price target of SentinelOne Inc S following upbeat Q3 FY23 results reported yesterday.

The company posted revenue of $164.16 million, beating the estimates of $156.09 million, and adjusted EPS of $(0.03), exceeding the $(0.08) estimate.

SentinelOne sees fourth-quarter revenue of approximately $169 million versus estimates of $166.46 million. The company also raised its full-year revenue guidance from $605 million to $616 million versus estimates of $605.66 million.

Raymond James analyst Adam Tindle raised the price target to $26 from $22 and maintained a price target of Strong Buy.

The analyst expects growth momentum to continue with AI product rolling out in Q1 and significant acceleration in new growth markets (triple-digit growth in Cloud and Data; now 20% of bookings), offering expansion opportunities while the core endpoint market persists in improvement. 

Tindle raised adjusted EPS estimates to $(0.30) from $(0.39) for FY24 and $(0.01) from $(0.03) for FY25. 

Needham analyst Alex Henderson boosted the price target to $26 from $23 with a Buy rating. 

The analyst says Sentinel still has a way to go to deliver profitability, but the positive Free Cash Flow target in H1FY24/FY25 looks achievable. 

The analyst expects the new products and ongoing managed services to deliver a robust business pipeline with an upsell likely 5x-6x per dollar of consulting revenues.

Henderson increased adjusted EPS estimates to $(0.30) from $(0.38) for FY24 and $0.06 from $(0.04) for FY25.

Also, William Blair analyst Jonathan Ho says SentinelOne can drive a healthy mix of new customer additions and existing customer expansion and deliver very strong operating leverage amid a challenging environment.

The analyst estimates EPS of $(0.30) for FY24 and $0.08 for FY25.

Moreover, Morgan Stanley boosted the price target to $25 from $20 and reiterated the Overweight rating. 

JMP Securities increased the price target to $33 from $22 and reiterated a Market Outperform rating.

Price Action: S shares are up 17.5% at $23.51 on the last check Wednesday.