S - SentinelOne: Scale Is Needed To Avoid Irrelevance

2024-06-30 10:56:24 ET

Summary

• SentinelOne's business has stabilized in recent quarters but there are still questions about competitive positioning.
• Improved margins and achieving cash flow breakeven have reduced some of the doubts about SentinelOne's efficiency. Increased investment is likely to limit further margin gains in the near term though.
• While SentinelOne's valuation appears attractive, it will likely continue to trade at a discount to peers while doubts about its viability as a standalone company persist.

After a fairly disastrous late 2022 and early 2022, where growth fell off a cliff, SentinelOne's ( S ) business has demonstrated some resilience in recent quarters. SentinelOne's losses remain fairly large though, and a surge in hiring will likely dampen future margin improvements....

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