On Thursday, Bernstein, a financial firm, adjusted its outlook on SentinelOne Inc (NYNYSE:SE: S), a cybersecurity company. The firm lowered the price target to $30 from $32 while maintaining an Outperform rating on the stock. According to InvestingPro data, analyst targets for SentinelOne range from $22.12 to $35, with the stock currently trading at $25.93.
The revision came after SentinelOne's fiscal third quarter 2025 results, which presented a nuanced picture. The revenue exceeded expectations by a margin of $1.1 million or 50 basis points compared to the guidance.
The company has maintained strong revenue growth of 34.38% over the last twelve months, with an impressive gross profit margin of 73.63%. Despite the smallest beat since macroeconomic issues began, the company increased its full-year revenue forecast by $3 million and the implied guidance for fiscal fourth quarter 2025 by nearly $2 million.
In a follow-up discussion, CEO Tomer Weingarten (NYSE:WRI) confirmed that the net retention rate (NRR) remains relatively stable quarter over quarter at around 110%. This stability suggests the NRR may have reached its lowest point, although the company's sales efforts continue to prioritize acquiring new customers. InvestingPro subscribers can access additional insights through comprehensive Pro Research Reports, which provide deep-dive analysis of SentinelOne's growth metrics and market position.
Bernstein's price target adjustment reflects a more conservative forecast for the fourth quarter due to the marginal revenue beat. Additionally, the firm has delayed the expected recovery of NRR by one year, taking into account the company's extended focus on new customer acquisition.
The new price target is derived from a 50/50 blend of a ~10x Price to Next (LON:NXT) Twelve Months (NTM) revenue multiple based on Bernstein's Rule-of-40 regression and a Discounted Cash Flow (DCF) model with a 13% Weighted Average Cost of Capital (WACC) and a 3% terminal growth rate.
Despite the reduced price target, Bernstein continues to see SentinelOne as an Outperform-rated investment. This aligns with InvestingPro's analysis, which highlights the company's strong 65.4% price return over the past six months and indicates that analysts expect profitability this year.
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