Bert Hochfeld article about SentinelOne

Bert Hochfeld has just published a favorable article on SentinelOne on Seeking Alpha. Here’s the link if you wish to read it.

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I was about to post about Bert’s article, but you beat me to it. Let me give you some background:

  1. The article, while on Seeking Alpha, SentinelOne Stock: Time To Reconsider Once Overvalued Cybersecurity Sprinter (NYSE:S) | Seeking Alpha is a free article for the first three days, after which you will need a subscription. So don’t delay. It’s very worth reading.

  2. When I first started this article I used to read everything Bert wrote as he is really excellent, and has very good ratings. Tip Ranks rates him #20 out of 24,000+ analysts so in the top 1/1000th of them, or top 1/10th of 1%. However after a while our paths diverged as he was very conservative with the companies he followed and thus stopped writing about companies that I was interested in.

  3. This article is super positive for Bert writing about a young high growth company and Bert explains that it’s because it is the fastest growing of any company in the cybersecurity space, and because the valuation has come down to a level to be a relative bargain in spite of not yet being profitable. From a conservative guy like Bert, that is really a vote of confidence.

  4. This is a straightforward, easy to understand article without a lot of getting lost in technology. You will really enjoy reading it. I certainly did, and I recommend it myself.

Best,

Saul

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I put this into the Palo Alto Network thread before reading this one.

From Bert’s Article
The endpoint security market itself, while large, is “not the highest growth market in cybersecurity”. The latest study published and linked here, consistent with many other studies, suggests a CAGR of about 8%+ with a terminal value of $28 billion for endpoint security. But both SentinelOne and Crowdstrike have product sets that extend beyond the borders of endpoint security. That said, (EDR)is the real reason both Crowdstrike and SentinelOne are growing so rapidly is that of industry disruption. The use of AI as a technology has dramatically changed how software companies provide endpoint security compared to legacy offerings from Symantec and many others. Over time, the use of AI powered solutions will essentially replace all of the legacy solutions out there. The new technology is far more effective at securing devices than what it is replacing which is why uptake has been so rapid and that is likely to remain the case for the foreseeable future.

After I did some poking around, I put these numbers together.

According to IDC Market Share for EDR 2020. 2021
Crowdstrike. 5.8%.->9.7%
SentinelOne. 0.09% ->1.1%
Palo Alto Networks. 2.2%->2.4%

I found this reason to support my reason for holding Crowdstrike, since I like to hold he leader despite there being room enough for others to win.

Best

Jason

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Here’s all the numbers…

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Hi Willo,
Those percentage numbers that you are using are way, WAY, out of date.

Crowdstrike and Sentinel both finished their 2020 fiscal years in Jan of 2020. Those numbers are almost three years old. They will both finish fiscal 2023 in a couple of months (at the end of January).

Looking at each of their last reported quarters (July quarters)

Crowdstrike grew revenue at 58%, down from 94% in their same quarter in fiscal 2020.
Sentinel grew revenue at 124%, up from 96% in their same quarter in fiscal 2021.

Saul

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