Latest news with #TalLiani
Yahoo
29-05-2025
- Business
- Yahoo
SentinelOne's Profitability And Growth Trajectory Less Promising Than Competitors: Analyst
SentinelOne, Inc. (NYSE:S) shares are trading lower on Thursday after its disappointing post-market Q1 earnings release the previous day. The cybersecurity company reported revenue of $229.03 million, beating the consensus estimate of $228.35 million. Adjusted earnings of two cents per share were in line with analyst estimates. The company lowered its full-year 2026 revenue guidance from $1.007 billion to a range of $996 million to $1.001 billion. Analysts were expecting full-year revenue of $1.01 analysts downgraded/revised the price forecast for the stock. B of A Securities analyst Tal Liani downgraded the company from Buy to Neutral, cutting the price forecast from $24 to $21. The analyst writes that the endpoint security market remains appealing but has three main concerns. SentinelOne's results have been uninspiring for several quarters now, marked by two consecutive quarters of reduced guidance, says Liani in an analyst note. The analyst writes that they previously viewed the guidance cut as a result of the new CFO resetting expectations but now see deteriorating business trends. The analyst raises concerns about SentinelOne's growth rate relative to its size and profitability compared to competitors like CrowdStrike. Despite similar growth rates, it operates from an 80% smaller revenue base and carries approximately 650 basis points lower profitability when adjusted for scale. The analyst also highlights that the stock's performance has lagged significantly, underperforming the NASDAQ by 1000 basis points year-to-date and 1860 basis points over the past 12 months. Liani anticipates challenges in meaningfully improving margins to persist, with the company focusing on smaller customers and MSPs. Goldman Sachs analyst Gabriela Borges revised the price forecast from $23.50 to $21.50 while maintaining a Neutral rating. The analyst writes that she believes SentinelOne is experiencing more varied business trends for two main reasons. First, their growth strategy relies heavily on acquiring new customers, where deal activity has slowed more significantly than existing clients. Second, they face persistent competitive pressure. Borges says that while she maintains a positive view of SentinelOne's core technology, this competitive environment, with vendors offering greater platform scale, remains an overhang. The analyst revised the revenue estimates for FY26, FY27, and FY28 to $997 million (from $1.008 billion), $1.202 billion (from $1.227 billion), and $1.413 billion (from $1.459 billion), respectively, owing to intense competition and the challenge of balancing revenue growth with profitability. Apart from this, several other analysts downgraded the stock, including: JP Morgan analyst Brian Essex downgraded the rating from Overweight to Neutral and lowered the price forecast from $22 to $19. Wells Fargo analyst Andrew Nowinski downgraded the stock from Overweight to Equal-Weight and lowered the price forecast from $22 to $18. Price Action: S shares are trading lower by 11.0% to 417.50 at last check Thursday. Read Next:Photo by Tada Images via Shutterstock Date Firm Action From To Mar 2022 Barclays Maintains Overweight Feb 2022 DA Davidson Initiates Coverage On Buy Jan 2022 Wolfe Research Initiates Coverage On Outperform View More Analyst Ratings for S View the Latest Analyst Ratings UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? SENTINELONE (S): Free Stock Analysis Report This article SentinelOne's Profitability And Growth Trajectory Less Promising Than Competitors: Analyst originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
25-03-2025
- Business
- Globe and Mail
Bank of America Says CrowdStrike Earns a ‘Buy' Rating as Recovery Gains Momentum
In this digital age, in which cybersecurity threats are rapidly evolving, companies that provide digital protection are more important than ever. Valued at $89.8 billion, CrowdStrike Holdings (CRWD) is one of today's most well-known cybersecurity companies. While the stock surged 147.2% in 2023, 2024 was a more difficult year, with the stock gaining just 38.6%. A faulty software update in July caused roughly 8.5 million Microsoft Windows systems to crash worldwide. CrowdStrike quickly identified and resolved the issue, and it has implemented recovery measures to regain customer's trust. Recently, Bank of America Securities analyst Tal Liani reaffirmed CrowdStrike's 'Buy' rating, citing the company's key strategic and financial initiatives aimed at strengthening its market position following the July outage. CRWD stock is up nearly 9% in the year to date, compared to the S&P 500 Index's ($SPX) dip of 2%. Let's find out if Crowdstrike is a buy now. Crowdstrike: BofA Analyst Is Impressed With the Recovery Strategy Following discussions with CrowdStrike's CFO and chief accounting officer, Liani outlined several steps the company has taken to recover from the outage and drive long-term growth. These include the introduction of a Customer Commitment Package and the expansion of Falcon Flex deals, which aim to rebuild customer trust and increase adoption rates. Management expects a rebound in net new annual recurring revenue (nnARR) in the second half of the year, driven by increased demand for Cloud Security and Identity Security. CrowdStrike is well-positioned to capture market share as people increasingly rely on cybersecurity solutions in the face of rising threats. The analyst noted that one of the most promising indicators of CrowdStrike's future success is the widespread use of Falcon Flex deals. These agreements, which offer customers adaptable, scalable security solutions, have gained significant traction. Notably, 60% of Falcon Flex dollars have already been spent ahead of schedule, indicating strong customer engagement and potential growth at contract renewal. As management emphasized during the Q4 fiscal 2025 earnings call, the total value of Falcon Flex deals reached $2.5 billion, a tenfold increase year-over-year Beyond its recovery efforts, Liani stated that CrowdStrike is prioritizing innovation and expansion to ensure long-term growth. The introduction of CharlotteAI, along with the company's robust Cloud Security and Identity Security offerings, is expected to play an important role in its growth strategy. According to management, customers have reported a significant reduction in manual workload since using CharlotteAI. Notably, one European financial services firm stated that Charlotte AI summarizes security activity in 10 to 15 seconds, whereas previously it took 20 to 30 minutes. This tangible AI outcome is driving Falcon's adoption as an AI-native security operations center (SOC). CrowdStrike hopes that by implementing these new platform pillars, it will gain a competitive advantage and strengthen its position in the industry. Liani believes that despite the temporary setbacks, CrowdStrike's proactive approach and strategic investments will drive accelerated growth in the second half of the year. With growing customer adoption of its security solutions and ongoing innovation, the company is well-positioned for long-term success. He has set a price target of $420, implying 13% upside from current levels. A Strong End to Fiscal 2025 CrowdStrike's recent fourth quarter and fiscal 2025 results indicate that the company is recovering well. In Q4, the company reported a 25% increase in revenue to $1.06 billion, with adjusted earnings per share (EPS) rising 8.4% to $1.03. Both revenue and earnings exceeded analysts' expectations. For the full fiscal year, revenue increased by 29% to $3.95 billion, while EPS increased by 27.1% to $3.93. The company's average recurring revenue (ARR) increased 23% to $4.24 billion. The company generated $1.07 billion in free cash flow. At the end of Q4, the company had $4.3 billion in cash and cash equivalents. For fiscal 2026, management expects a revenue increase of 18% to 21% in fiscal 2026, while earnings per share may fall by 12% to 15%. Management reaffirmed that the company's AI-powered security solutions will continue to drive growth toward its $10 billion ARR goal by fiscal 2031. Overall, analysts covering CRWD stock expect revenue to grow by 21% in fiscal 2026, while earnings may fall by 12.5%. Analysts predict that revenue will increase by 21.9% in fiscal 2027, followed by an earnings increase of 33.3%. CRWD stock is currently trading at a premium of 105 times forward earnings for 2026. Is CRWD Stock a Buy Now, According to Wall Street? Wall Street maintains an average rating of ' Strong Buy ' on CRWD stock. Of the 45 analysts that cover the stock, 32 rate it as a 'Strong Buy,' three as a 'Moderate Buy,' nine as a 'Hold,' and one as a 'Strong Sell.' The analysts' average price target of $407.10 suggests that the stock could rise by up to 9.4% from current levels. The highest target price is $475, implying that the stock could gain 27% over the next 12 months. The Key Takeaway CrowdStrike remains a compelling buy for long-term investors willing to take on the short-term volatility. Starting with a small position and adding more shares on pullbacks could be a good strategy. The global cybersecurity industry is expected to generate $271.9 billion by 2029. CrowdStrike's strong market position, AI-driven security model, and subscription revenue stream make it an appealing growth stock in the cybersecurity industry. However, given the company's high valuation, risk-averse investors may prefer to wait for a better entry point.
