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SentinelOne Stock: At 43x Next Year's Sales, I'm Not Getting Involved Here

Oct. 06, 2021 10:01 AM ETSentinelOne, Inc. (S)7 Comments


  • SentinelOne is growing at a very rapid rate, so it's easy to be seduced here.
  • And even though profits shouldn't matter at this stage, its rule of 40 stands at 23%, which is far from impressive.
  • Investors are paying 43x next year's revenues, which is probably more than a fair multiple already for this stock.
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Cyber security IT engineer working on protecting network against cyberattack from hackers on internet. Secure access for online privacy and personal data protection. Hands typing on keyboard and PCB

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Investment Thesis

SentinelOne (NYSE:S) is a very fast-growing cybersecurity company, guiding for more than 100% growth rates. Also, it's recognized by Gartner as a Leader in Endpoint Protection Platform. But the problems are two-fold, that its path to GAAP profitability

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Comments (7)

the TAM for S is basically as large as CRWD's TAM. But S' ARR is only <200m...The runway is super huge. If they can achieve 80% CAGR for the next 3 year, then it'll be far less than 30x, where the high-growth peers are trading at.
wsoyke profile picture
@Crowded Place
So you're predicting phenomenal revenue growth, with low margins, and no share price growth for 3 years, likely dilution, then it will be valued similar to top shelf peers?
I'd pass on that. 100% revenue growth means little from such a small base.
yea... it really depends on how you look at their growth trajectory. I would say, for high multiple stocks, valuation should directly reflect the growth potential (LT CAGR), so it doesn't matter whether it is small or large in terms of EV/S.

I've already embedded the share dilution though.
Rubenslash profile picture
Why do you need multiple expansion at this growth rate? Even if the stock grows at half the revenue growth rate (= multiple contraction), you will see stellar returns.
S is overvalued and not best of breed.
My comment on the previous S article is like a summary of your article.
Man! You must be very short on $S. Most of your commentary is pure fiction at best.
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