SentinelOne Stock Slumps After Full-Year Revenue Outlook Disappoints—Key Level to Watch

Shares in SentinelOne (S) slumped more than 12% in extended trading on Wednesday after the cybersecurity software maker issued a soft full-year sales outlook which overshadowed quarterly top- and bottom-line results that topped analysts’ forecasts.

The company sees fiscal 2025 full-year revenue ranging between $812 million and $818 million, with the $815 million midpoint of that band falling short of the $817.1 million modeled by analysts.

For the current quarter, the security software maker guided revenue of $181 million, matching the consensus forecast and representing year-over-year improvement of 36%.

For the fiscal 2024 fourth quarter ended Jan. 31, the company posted a loss of 2 cents per share on an adjusted basis, narrower than the 4 cent a share loss analysts had expected. Revenue in the period of $174.2 million grew 38% from a year earlier and comfortably topped the Street view of $169 million. Annualized recurring revenue in the quarter tallied $724.4 million and jumped 39% from the same quarter last year.

In a letter to shareholders, the company cautioned that customers continue to closely monitor their spending in the current economic conditions. “The broader demand environment remains similar to the trends we discussed in prior quarters. Organizations continue to focus on costs and efficiency amid macroeconomic conditions.”

However, SentinelOne CEO Tomer Weingarten said the company isn’t seeing buyer fatigue reported earlier this year by competitor Palo Alto Networks (PANW), adding that customers are continuing to spend aggressively on endpoint security, data analytics, and cloud security. Weingarten also noted that the company plans to prioritize signing up new customers over increasing the spend of existing accounts.

SentinelOne shares trended higher between November and February but ran into overhead resistance around $30 near a key horizontal line connecting a range of price action over the past 18 months. If earnings-related selling intensifies in the coming days, monitor if the stock finds support from another important horizontal trendline positioned around $23.50. A breakdown below this crucial area could see the price revisit lower levels toward the 200-day moving average.

SentinelOne shares fell 12.2% to $24.52 in after-hours trading. Through Wednesday’s close, the stock had nearly doubled over the past year.

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As of the date this article was written, the author does not own any of the above securities.