2023-06-12 09:45:33 ET
Morgan Stanley shifted to a bullish stance on SentinelOne ( NYSE: S ) on Monday, arguing that the market has been oversold following an earnings disappointment earlier this month.
Equity analysts Hamza Fodderwala and Keith Weiss advised clients that, even accounting for recent execution issues, the market is “now mispricing the inherent value of SentinelOne as a long-term share gainer and the potential for meaningful margin upside” ahead for the company. The risk/reward proposition is far more favorable following the selloff, the duo explained.
“While recent execution missteps have shaken investor confidence, we think the intrinsic
value of the asset is much higher than the market ascribes and see a compelling
risk-reward with valuation now at a 50% discount to peers on a growth adjusted
EV/Sales basis,” the pair concluded. “With topline forecasts now appropriately derisked, we see a clear catalyst path to value accretion from more consistent beat/raise cadence and stronger
cost discipline driving positive FCF next year.”
Weiss and Fodderwala hiked their price target to $20 from a prior $15 alongside the upgrade from Equal to Overweight. Shares of SentinelOne ( S ) surged 8.63% shortly after Monday’s opening bell.
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SentinelOne stock surges as Morgan Stanley moves to Buy