Bessemer Venture Partners Top 10 Revenue Growers: #2 SentinelOne

Investing Strategies Abandoned Arctic Outpost #13
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#2 SentinelOne (S).

Note Before Note One: I think they should just rename the company and go with the stock symbol: AI (Isn’t Sentinel to young to have a mid life crisis?)

Revenue Growth: 38.1%

Note One: SentinelOne has Higher Revenue Growth than both CRWD and ZS.

What S Does:

SentinelOne, Inc. operates as a cybersecurity provider in the United States and internationally. Its Singularity Platform delivers an artificial intelligence-powered autonomous threat prevention, detection, and response capabilities across an organization’s endpoints, cloud workloads, and identify credentials, which enables seamless and autonomous protection against a spectrum of cyber threats. In addition, it offers endpoint protection, endpoint detection and response, cloud and identity security, attack surface management, mobile endpoint security, xdr power tools, watchtower, and vigilance MDR.

What SentinelOne says about SentinelOne:

The First Security AI Platform to
Protect the Entire Enterprise.

Break Down Security Silos. Gain Enterprise-Wide Visibility and Control. Action Your Data In Real-Time with AI.
…

Current Data:

Current Price: $21.11
52 Wk Range: 12.43 - 30.76
Market Cap: $6.54B +/-
YTD Momentum: Negative 23.1%
EV/Forward Revenue: 6.3
Gross Margin: 72.3

Latest QRTLY Report:

Conference Call:

https://seekingalpha.com/article/4678054-sentinelone-inc-s-q4-2024-earnings-call-transcript?source=content_type%3Areact|section%3Aearnings_summary|section_asset%3Aearnings_history|first_level_url%3Asymbol|button%3Atranscript

Highlights:

  • Revenue increased 38% year-over-year

  • ARR up 39% year-over-year

  • Customers with ARR of $100,000 or more grew 30% to 1,133 as of January 31, 2024. Dollar-based net retention rate (NRR) was approximately 115%.

*. Gross margin: GAAP gross margin was 72%, compared to 68%. Non-GAAP gross margin was 78%, compared to 75%.

  • Non-GAAP operating margin was (9)%, compared to (35)%.

  • Free cash flow margin was (6)%, 14 percentage points higher compared to (20)%.

Note Two: The company improved on just about all key metrics ACB and provided what supporters called a "solid Qtr’.

But Then…But Then… they provided Guidance for Revenue Growth of 35.6% for Q1 and the stock tanked. Bigly. Here is the Headline:

https://seekingalpha.com/news/4079006-sentinelone-plunges-weak-guidance-overshadows-q4

Last 4 Quarters Revenue Growth:

38.1%
42.3
45.8
70.5

Note: S has the 3rd lowest EV/FWD Rev ratio of the BVP Top 10. The good news is that perhaps the stock price has bottomed out and the upcoming Quarterly Report will be a doozy: In which case it’s Laissez Les Bons Temps Rouler! The potential bad news is that the report might just be more of the same, in which case the stock price might just languish some more. The company is scheduled to report Q1 on May 30th or so and that is their next shot at redemption.

Couple of Scouting Reports:

https://seekingalpha.com/article/4683925-sentinelone-s-stock-high-risk-high-reward-opportunity-for-aggressive-investors?source=content_type%3Areact|section%3Asummary|section_asset%3Aall_analysis|first_level_url%3Asymbol|button%3ATitle|lock_status%3ANo|line%3A1

All the Best,
BDH Investing.

6 Likes
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The problem I have with S, besides it having Sprint’s old ticker, is that it can’t be as good as Crwd. All of these security companies are forming a network and the one with the most people in the network will win. Although Panw has more they are chasing Crwd trying to catch up.

Andy

2 Likes
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Couldn’t agree more. The other thing about S that is a Red Flag for me is that the growth fell off a cliff very early in its life cycle. After that its been steady - so theres that, but they never had the spectacular numbers like some of the other security outfits.

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