What Happened?
Shares of cyber security company SentinelOne (NYSE:S) jumped 3% in the morning session after Rosenblatt Securities initiated coverage with a "Buy" rating and a $24 price target.
The investment firm noted that the AI-driven cybersecurity leader was "significantly undervalued," trading at an estimated 40% discount compared to its peers. Rosenblatt's analysis pointed to the company's strong year-over-year revenue growth and its successful shift toward non-endpoint solutions, which accounted for half of new bookings. The firm also highlighted SentinelOne's improving free cash flow, suggesting a clear path to value creation. This new rating presented a "compelling opportunity" for investors with a long-term perspective who could look past short-term macroeconomic challenges.
After the initial pop the shares cooled down to $18.06, up 1.9% from previous close.
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What Is The Market Telling Us
SentinelOne’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3.2% on the news that the Trump administration announced intentions to impose a 35% tariff on many goods imported from Canada. This move is far more than a typical trade dispute; it targets the United States' largest and most deeply integrated trading partner. Canada is not merely a neighbor but a critical component of North American supply chains, particularly in sectors like automotive, energy, and critical minerals. This move sparked concerns about potential retaliatory actions and a wider impact on the North American economy, leading to a risk-off sentiment among investors. The S&P 500, Dow Jones Industrial Average, and Nasdaq all opened lower, pulling back from recent record highs and heading for their first weekly loss in three weeks.
SentinelOne is down 20% since the beginning of the year, and at $18.06 per share, it is trading 37% below its 52-week high of $28.68 from December 2024. Investors who bought $1,000 worth of SentinelOne’s shares at the IPO in June 2021 would now be looking at an investment worth $425.05.
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