S · SentinelOne
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $26.63
Note written ·
Price against the kill line
16.6% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $26.63, on record since 10 November 2026. The shares are up 1.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $26.63, 12% above the last close (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 31 July 2026, filed 28 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 292
- Revenue, change on a year (%)
- +20.6
- Gross margin (%)
- 72.1
- Operating margin (%)
- −31.1
- Free cash flow, four quarters ($M)
- 56.5
- Free-cash-flow yield (%)
- 0.7
All filed numbers
What SentinelOne reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 292 | +20.6 | 72.1 | −31.1 |
| first filed | 277 | +20.8 | 71.8 | −28.8 |
| first filed | 271 | +20.2 | 72.6 | −29.5 |
| first filed | 259 | +22.9 | 73.8 | −28.3 |
| first filed | 242 | +21.7 | 75.0 | −33.3 |
| first filed | 229 | +22.9 | 75.3 | −38.2 |
| Pre-tax income ($M) | −87.0 |
| Net income ($M) four quarters: −340 | −93.4 |
| Diluted shares, change on a year (%) against the quarter to 31 July 2025 | +3.2 |
| Operating cash flow ($M) | 57.3 |
| Capital spending ($M) | 0.8 |
| Free cash flow ($M) | 56.5 |
| Cash and short-term investments ($M) | 655 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +5.6% on a year | 578 |
| Backlog, orders not yet delivered ($M) +41.7% on a year | 1,700 |
| Receivables ($M) | 220 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 1,449 |
| Market value ($M) | 7,582 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 5.2 |
| Free-cash-flow yield (%) | 0.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.0% of shares outstanding sold short, 1.9 days of average trading to cover, +25.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $22.4M |
| 12 monthsfrom | $596K | $43.1M |
This note mentions Anthropic, the company that makes Claude, the AI model that wrote it. The same method and sources apply as on every note. The conflict of interest, stated.
The thesis
SentinelOne shares are more likely to trail the S&P 500 than lead it over the next three months. Net new annual recurring revenue (ARR) grew 4% in the second quarter of fiscal 2027 (Q2 FY2027), and nothing reported since 27 August 2026 shows that rate improving. The third-quarter report, expected in early December, settles whether the new AI-agent products move the numbers.
The shares closed at $23.52 on 9 November 2026, 10.5% below the $26.27 52-week high close of 9 October 2026. They closed at $25.65 on 27 October 2026, the day before a sector selloff. The 14-day relative strength index (RSI) reads 56.6, and the shares are up 5.5% over three months, per adjusted daily closes.
The story is well known: the story has been well known since the CNBC segments of 22 September 2026 and 25 September 2026, and the last analyst target raises found were on 22 October 2026 and 23 October 2026. The company's news flow since then has been partner and integration announcements, none with a revenue figure.
The operating base is unchanged from the 27 August 2026 report. Q2 revenue was $292 million, up 21% year over year, and net new ARR was $56 million. FY2027 revenue guidance is $1.202–1.207 billion.
Bullish and bearish views on SentinelOne, Inc.
The bull case on SentinelOne, Inc. (S), in brief: analysts raised targets after OneCon. The bear case: net new ARR growth is thin.
Bull case
- Analysts raised targets after OneCon. Wedbush raised its target to $27 (Outperform) on 22 October 2026. Rosenblatt raised its target to $28 (Buy) on 23 October 2026. Needham's target is $31 (13 October 2026), and MarketBeat showed a consensus target of $23.92 after that raise.
- Partner and integration news keeps arriving. SentinelOne named Anthropic's Claude Cowork an AI-security integration on 2 November 2026, added Claude Mythos 5.1 to its Wayfinder services on 29 October 2026, and announced a Snyk integration on 4 November 2026. Cloudflare named it Technology Ecosystem Partner of the Year on 5 November 2026.
- Contract commitments outpace revenue. Remaining performance obligations were $1.7 billion at Q2 FY2027, up 45% year over year, against 21% revenue growth (results, 27 August 2026).
- Guidance rose at the last report. The company raised FY2027 revenue guidance to $1.202–1.207 billion on 27 August 2026. A Zacks summary of the Q2 outlook puts third-quarter revenue guidance at $309–311 million.
- Dilution is capped well above the price. Capped calls offset conversion dilution up to $48.02 a share, and the 0% notes pay no cash interest (14 October 2026 pricing release).
Bear case
- Net new ARR growth is thin. Net new ARR rose 4% to $56 million at Q2 FY2027 (27 August 2026). Revenue growth of 21% depends on that figure improving.
- AI-security revenue has no dollar figure. Management said AI-security ARR tripled at Q2 (27 August 2026) and gave no amount. The OneCon launch releases of 21 October 2026 and the November integration announcements also gave none.
- Earnings guidance was lowered. Adjusted EPS guidance for FY2027 was cut to $0.30–0.32 from $0.32–0.38 on 27 August 2026. The Q2 GAAP operating margin was (31%) against a 10% non-GAAP margin.
- Sector selling pressure showed on 28 October 2026. SiliconANGLE reported Fortinet fell about 26% after hours despite a third-quarter beat. 247WallSt reported software shares falling again on 29 October 2026. Several outlets reported Palo Alto Networks, CrowdStrike and Zscaler each gave up 6% to 7% after hours.
- Convertible supply and insider sales. The $1.25 billion notes grew with the $187.5 million option exercised in full (8-K, 16 October 2026), and the repurchase of about 6.2 million shares was priced at $24.01. CEO Tomer Weingarten sold 527,368 Class A shares at a $25.2642 weighted average on 5 October 2026 under a 10b5-1 plan, per SEC Form 4.
Price setup
The 9 November 2026 close of $23.52 sits above the $22.82 post-pricing close of 14 October 2026 and the $22.51 close of 18 September 2026. It sits below the $24.01 price at which the company repurchased shares alongside the note offering. The 52-week high close is $26.27 (9 October 2026).
A move back above $26.27 would need a new fact; the last two weeks added partner news but no financial figures.
Crowding evidence is mixed. Retail-facing attention peaked in late September with the CNBC segments. The CEO's 10b5-1 plan and the CFO's plan adopted 9 June 2026 mean more Form 4 sales may appear. The Q3 report is about three weeks away, and a third-party tracker (Bullstory) lists 2 December 2026, which the company has not confirmed.
Catalysts ahead
- ~3 December 2026 (est.): Q3 FY2027 report for the quarter ended 31 October 2026; a third-party tracker lists 2 December 2026. Shows whether net new ARR growth improves from Q2's 4%, whether FY2027 revenue guidance holds above $1.202 billion, and whether AI-security ARR gets a dollar figure.
- ~31 December 2026 (est.): Company target for general availability of Prompt Security guardrails for Amazon Bedrock AgentCore ('later in 2026'). Turns an announced AI-agent integration into a sellable product; a slip would push AI-security revenue further out.
Elapsed catalysts
- ~13 November 2026 (est.): Announcement of the Q3 FY2027 report date, based on last year's 13 November 2025 notice. Sets the date of the report that decides the operating case. (passed)
What would change the view
A daily close above $26.63, 12% above the last close (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
SentinelOne trades with the large Cybersecurity names. CrowdStrike hit a 52-week high of $260.64 on 23 September 2026, and Palo Alto Networks rose over 3% the same day. The 28 October 2026 selloff after Fortinet's report showed the group falling together on guidance concerns.
Software shares more broadly react to reports that AI models from Anthropic and OpenAI could take work from security vendors. SentinelOne is also a partner of Anthropic through the Claude Cowork and Mythos integrations, so the same news cuts both ways.
The evidence, claim by claim (8)
- Q2 FY2027 revenue was $292 million, up 21% year over year; net new ARR was $56 million, up 4%. SentinelOne Q2 FY2027 results · as of
- FY2027 revenue guidance raised to $1.202–1.207 billion; adjusted EPS guidance lowered to $0.30–0.32 from $0.32–0.38. SentinelOne Q2 FY2027 results and outlook · as of
- Remaining performance obligations were $1.7 billion, up 45% year over year; AI-security ARR tripled with no dollar figure given. SentinelOne Q2 FY2027 earnings call · as of
- Convertible-note offering closed with the $187.5 million option exercised in full; net proceeds about $1.408 billion, capped calls about $151.4 million, repurchase about $150.0 million for roughly 6.2 million shares. SentinelOne Form 8-K · as of
- Wedbush raised its target to $27 (Outperform) on 22 October 2026; Rosenblatt raised its target to $28 (Buy) on 23 October 2026. Benzinga analyst actions · as of
- CEO Tomer Weingarten sold 527,368 Class A shares at a $25.2642 weighted average under a 10b5-1 plan adopted 2 July 2026. SEC Form 4 · as of
- Fortinet shares fell about 26% after hours on its third-quarter report despite a beat; Tenable fell with it. SiliconANGLE · as of
- SentinelOne announced an integration with Anthropic's Claude Cowork and a Snyk cloud-security integration; Cloudflare named it Technology Ecosystem Partner of the Year. SentinelOne company news · as of
Sources
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