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SentinelOne is experiencing rapid growth as it continues to expand its business. In its fiscal 2025 third quarter (ended Oct. 31), the company achieved a record $211 million in revenue, marking a 28% increase from the previous year. With the fiscal year set to conclude at the end of January, SentinelOne is projected to reach a total revenue of $818 million, another record-breaking achievement.
The demand for SentinelOne’s cybersecurity solutions among large enterprises is soaring. The platform now serves 1,310 customers with an annual contract value exceeding $100,000, reflecting a significant increase of 250 customers compared to the same quarter in 2024. Furthermore, there has been a notable rise in the number of customers spending over $1 million annually on the company’s software.
Although SentinelOne is currently operating at a loss due to substantial investments in customer acquisition, this strategy is driving rapid business expansion. However, the company is making progress towards profitability in fiscal 2025, with a reduced loss of $217 million over the first three quarters, down 18% from the previous year.
Despite climbing operating expenses, which are growing at a slower rate, combined with robust revenue growth, SentinelOne is moving towards a more favorable bottom line. On an adjusted non-GAAP basis, excluding one-off and non-cash expenses, the company reported a small profit of $2.9 million in the first three quarters of fiscal 2025, positioning it to achieve its first profitable year under this metric.
SentinelOne’s stock valuation has become more attractive relative to its peers following a decline in its price-to-sales (P/S) ratio to 9.1. This places it at a lower valuation than competitors like CrowdStrike, Palo Alto Networks, and Zscaler. Despite a slightly lower revenue growth rate than CrowdStrike, SentinelOne’s growth outpaces both Palo Alto and Zscaler, suggesting its stock may be undervalued compared to its industry rivals.
Amid projections of a 15% increase in cybersecurity spending to $212 billion in 2025, SentinelOne stands to benefit from this growing market opportunity. With room for multiple players in the cybersecurity sector, the company appears well-positioned for further growth. Considering these factors, SentinelOne could be an attractive investment option for the year.
Before making any investment decisions, it’s important to conduct thorough research and consider all relevant factors.
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