TLDR
- SentinelOne’s Q4 FY2026 revenue reached $271.2M, marking a 20% year-over-year increase and meeting analyst expectations.
- Full-year revenue surpassed $1 billion for the first time in company history, while ARR climbed 22% to $1.119B.
- The company achieved a quarterly record with $64M in net new ARR, alongside non-GAAP EPS of $0.07 that exceeded the $0.06 forecast.
- Forward-looking revenue projections for FY2027 of $1.195B–$1.205B and Q1 estimates of $276M–$278M failed to satisfy market expectations.
- Scotiabank reduced its price objective from $17 to $15, expressing worries about constrained investment strategy and insufficient proof of significant new client acquisitions.
SentinelOne (S) shares declined despite posting impressive fourth-quarter results, as the company’s outlook for the coming year left investors wanting more.
The cybersecurity company reported fourth-quarter fiscal 2026 revenue of $271.2 million, representing a 20% year-over-year increase. This figure aligned almost perfectly with Wall Street’s consensus estimate of $271.17 million. Non-GAAP earnings per share reached $0.07, surpassing the analyst consensus of $0.06 by a penny.
For the complete fiscal year, revenue totaled $1,001.3 million — representing 22% growth and marking the company’s first-ever breach of the $1 billion revenue milestone.
Annual recurring revenue expanded 22% to reach $1,119.1 million at the end of January. The company added $64 million in net new ARR during Q4, which management characterized as a quarterly record.
The quarter also brought news of a strategic partnership with Cloudflare, representing one of the more significant customer agreements the company has publicly announced in recent months.
Nevertheless, shares fell approximately 4% during premarket hours. The culprit: forward-looking projections.
Forward Outlook Falls Short
SentinelOne provided Q1 fiscal 2027 revenue guidance of $276 million to $278 million, which was essentially aligned with Street expectations. The full-year revenue projection of $1.195 billion to $1.205 billion proved to be the sticking point for investors.
The company also outlined expectations for non-GAAP operating income of $110 million to $120 million for the full year, demonstrating its ongoing march toward profitability. This metric actually exceeded what analysts had anticipated.
Scotiabank reduced its price target to $15 from $17 while maintaining a Sector Perform rating. The firm characterized the Q4 performance as “solid” but expressed a preference to remain neutral.
The analyst noted that SentinelOne’s outlook suggests only marginal growth deceleration in fiscal 2027. Additionally, they highlighted the company’s track record of raising initial guidance in each of the past three fiscal years — potentially indicating that current projections are deliberately conservative.
Wall Street Opinions Diverge
Bearish sentiment isn’t universal. Cantor Fitzgerald maintained an Overweight rating with an $18 price target, highlighting operating margins and ARR performance that surpassed expectations.
Needham also retained a Buy rating while lowering its price target from $21 to $18. The firm expressed concerns regarding the Q1 net new ARR capture rate embedded in management’s guidance.
Scotiabank’s primary concern extends beyond the financial metrics — it’s focused on strategic direction. The bank suggested that limiting investment expenditures could constrain future revenue expansion.
The firm also indicated that its channel checks with industry executives haven’t revealed substantial evidence of SentinelOne securing additional major customer contracts beyond the Cloudflare partnership.
When Scotiabank published its analysis, shares were trading at $13.78, falling short of even the firm’s reduced $15 price objective.
InvestingPro data indicates analysts are projecting earnings of $0.19 per share for fiscal 2027, which would represent the company’s inaugural full-year profit. Based on these forecasts, the stock appears undervalued at current levels.
SentinelOne has a history of raising guidance throughout the past three fiscal years, which some analysts interpret as evidence that current projections may be deliberately conservative. Scotiabank, however, requires additional evidence of significant customer wins before adopting a more optimistic stance on the stock.
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