BTIG upgraded SentinelOne , Inc (NYSE:S) to a Buy rating (From Neutral) and introduced a 12-month price target on the stock of $30.00 after conducting a series of field checks across the security software space.
BTIG conducted a number of field checks across the security software segment, speaking with five prominent enterprise CISOs/CIOs to gather insights into the endpoint security market. In summary, there was a noticeable increase in discussions regarding the endpoint security landscape across all interactions. Analysts concluded with a more positive outlook on the market's growth potential in 2024 compared to 2023.
“Within this context, feedback on S was consistently positive.” Wrote BTIG in a note.
“We see clear room for continued share gains in the company’s core target market. And we are bullish on new product initiatives,” Added BTIG.
All five of the contacts, who closely monitor customer spending trends, highlighted that endpoint security is expected to experience more favorable conditions in 2024 compared to 2023. This positive trend is attributed to an overall improved spending environment in security software for 2024, with 2023 being considered a year of digestion within the endpoint security sector.
BTIG is optimistic about S's new products, expecting them to boost the company's growth in the next 12-24 months. They highlight S's cloud security business as a promising opportunity, praise the PingSafe acquisition for expanding CNAPP capabilities, and find positive early feedback on new products like Data Lake and Purple AI.
S's sales have improved in the last six months, boosting confidence in both short and long-term forecasts.
For FQ4'24, the street expects ARR of $723 million (+38% y/y), but BTIG believes S could reach around $730 million (+40% y/y). In FY25, while starting conservatively, analysts anticipate S to outperform Street estimates, achieving growth in the 32% - 33% range, surpassing the projected 30% ARR growth.
Shares of S are up 8.29% in pre-market trading Monday morning.