Wedbush bullish on SentinelOne, initiates with an Outperform

As previously reported, Wedbush analyst Taz Koujalgi initiated coverage of SentinelOne with an Outperform rating and $19 price target. The company has an addressable market of close to $40B in Security and IT operations, which at its current run rate of about $500M ARR gives it a long runway for growth, the analyst argues. SentinelOne has also been improving its margin structure, and his analysis shows that its sales productivity is ramping up steadily. The company’s momentum slowed down recently due to macro issues impacting demand and extending sales cycle. However, Koujalgi notes that the company still expects to grow ARR at 50% year-over-year in 2024. He further believes the stock is pricing in these risks, and at 4-times 2025 EV/sales, the risk/reward is attractive.