SentinelOne: Profitability Concerns Are Overblown

Nov. 11, 2022 11:07 AM ETSentinelOne, Inc. (S)CRWD, PANW10 Comments
Richard Durant profile picture
Richard Durant
4.91K Followers

Summary

  • SentinelOne is achieving rapid growth as they expand their portfolio of solutions. This growth has also been the product of an extremely strong demand environment.
  • Concerns over large losses and relatively low gross margins are outweighing all other aspects of the stock at the moment.
  • SentinelOne's stock could perform well going forward as inflationary fears recede, provided that growth remains reasonably strong and margins continue to improve.

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SentinelOne's stock (NYSE:S) has had a tough time since listing in 2021, despite the company performing quiet well. This has been due to a high initial valuation, rapidly rising discount rates and growing concern over the company's losses. While SentinelOne's operating expenses

Sentinel Total Addressable Market 2021

Table 1: Sentinel Total Addressable Market 2021 (source: Created by author using data from SentinelOne)

SentinelOne's Singularity Platform

Figure 1: SentinelOne's Singularity Platform (source: Created by author)

SentinelOne's Singularity Platform

Figure 2: SentinelOne's Singularity Platform (source: SentinelOne)

SentinelOne Revenue Growth

Figure 3: SentinelOne Revenue Growth (source: Created by author using data from company reports)

SentinelOne ARR

Figure 4: SentinelOne ARR (source: SentinelOne)

SentinelOne Customers

Figure 5: SentinelOne Customers (source: Created by author using data from SentinelOne)

SentinelOne Dollar Based Net Retention Rate

Figure 6: SentinelOne Dollar Based Net Retention Rate (source: Created by author using data from SentinelOne)

SentinelOne Gross Profit Margins

Figure 7: SentinelOne Gross Profit Margins (source: Created by author using data from company reports)

SentinelOne Operating Profit Margins

Figure 8: SentinelOne Operating Profit Margins (source: Created by author using data from company reports)

SentinelOne Operating Leverage

Figure 9: SentinelOne Operating Leverage (source: Created by author using data from company reports)

SentinelOne Operating Expenses

Figure 10: SentinelOne Operating Expenses (source: Created by author using data from SentinelOne)

SentinelOne R&D Expenses

Figure 11: SentinelOne R&D Expenses (source: Created by author using data from company reports)

SentinelOne Sales and Marketing Expenses

Figure 12: SentinelOne Sales and Marketing Expenses (source: Created by author using data from company reports)

SentinelOne Job Openings

Figure 13: SentinelOne Job Openings (source: Revealera.com)

SentinelOne Growth and Scale Adjusted Operating Profit Margins

Figure 14: SentinelOne Growth and Scale Adjusted Operating Profit Margins (source: Created by author using data from company reports)

SentinelOne Relative Valuation

Figure 15: SentinelOne Relative Valuation (source: Created by author using data from Seeking Alpha)

This article was written by

Richard Durant profile picture
4.91K Followers
I have been managing my own investment portfolio for the past 9 years with a focus on fundamental research and deep value investing over long time horizons. My primary interest is finding early stage innovations which will create long-term value. I have a Bachelors degree in finance, an MBA and have completed the CFA and CMT exams.richarddurant.substack.com

Disclosure: I/we have a beneficial long position in the shares of S, CRWD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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