SentinelOne Stock Plunges 18% In Premarket On Tepid Sales, Forecast – But Retail Dip Buyers Are Loading Up

• SentinelOne’s Q1 revenue increased 21% but missed analysts’ expectations.
• The company will lay off over 200 employees globally and take a $25 million charge from the restructuring.
• Stocktwits sentiment for the stock shifted to ‘extremely bullish’ from ‘bullish.’

SentinelOne shares plunged 18% in premarket trading on Friday after the cybersecurity firm missed first-quarter sales expectations, issued a weaker-than-expected forecast, and announced plans to cut 8% of its workforce. 

Still, retail sentiment around the stock improved, with some traders buying the dip after what they viewed as an exaggerated selloff.

On Stocktwits, the retail sentiment improved to ‘extremely bullish’ from ‘bullish’ the previous day, and 24-hour message volume rose 660%.

“$S recently sold my position but with this unjustified dip, I'm buying back in. I'll make my profit all over again,” said a trader. Another wrote: “$S loading up here. Potential M&A target. Anything below $16 is a good price.”

“The market algorithm completely overreacted to the $S earnings print,” said a trader. “Retail is panic-selling an 8% workforce cut, completely ignoring the fact that they just hit positive non-GAAP operating income and grew ARR to $1.16B.”

SentinelOne Q1 Recap

The company’s fiscal first quarter revenue grew 21% to $277 million, slightly below analysts’ expectation of $277.3 million. Adjusted profit of $0.04 per share came in higher than expectations of $0.02.

Consequently, SentinelOne said it expects Q2 revenue in the range of $289 million to $291 million, which missed analysts’ expectation of $291.9 million. It forecast adjusted earnings of $0.06 to $0.08 per share, in line with expectations.

The company said the workforce reduction would affect more than 200 employees globally and result in a one-time charge of about $25 million.

Competitive Landscape

SentinelOne is best known for its AI-powered “Singularity” platform, which helps businesses detect and stop cyber threats across endpoints, cloud workloads, identities, and data systems. 

Its core products include endpoint detection and response (EDR), cloud security, identity protection, managed threat detection, and “Purple AI,” an AI assistant for security teams. They compete with solutions from CrowdStrike, Palo Alto Networks and ⁠Microsoft.

Recently, SentinelOne has expanded heavily into AI security — including tools to secure AI agents and generative AI systems — while also deepening partnerships with Google Cloud and AWS. 

Year to date, SentinelOne shares have gained 20%.

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