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華爾街日報Citron Research Says This Cybersecurity Stock Is Deeply Mispriced And Is Set To More Than Double: 'This Company Must Be Rerated'
Investor Andrew Left’s Citron Research says a cybersecurity stock is being “deeply mispriced” by investors, while assigning a price target that’s more than double its current levels.
This Company ‘Must Be Rerated’
On Thursday, in a post on X, Citron Research made a bullish call on California-based cybersecurity company, SentinelOne Inc. (NYSE:S), while highlighting its role in identifying two Chinese state hackers involved in the massive Salt Typhoon breach.
“This is the same playbook that put CrowdStrike on the map,” CItron said in its report, while citing a Wired Magazine story that covered this incident.
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Citron noted that the market continues to value the stock “like it’s going out of business,” at 5.21 times sales, despite a clear shift in its business model.
“Wall Street is making the same mistake it always makes with software transformations,” Citron said, pointing to the company's recent shift from being an “endpoint vendor” to a fully native AI security platform, alongside its strong third-quarter performance, with more than 50% of its bookings from cloud, data and AI clients.
Citron called SentinelOne's generative AI product, Purple AI, the company’s “clearest competitive moat,” noting it was built natively rather than bolted on. Third-party research cited in the report highlighted a 338% three-year ROI, 55% faster threat remediation, and a 60% reduction in the likelihood of major security events.
Calling it “an obvious strategic target” for mergers and acquisitions by bigger players, Citron said “the company must be rerated,” while adding that it currently holds a long position on the stock, with a price target of $32, which is upside of 113% from its current level.
Strong Q3 Performance Meets Soft Q4 Outlook
SentinelOne reported its third-quarter results last week, reporting $258.91 million in revenue, up 23% year-over-year, and ahead of consensus estimates at $257.7 million, according to Benzinga Pro. Adjusted earnings during the quarter stood at $0.07 per share, which again beat analyst estimates at $0.05.
Yet, the stock pulled back following the results, owing to a soft fourth-quarter outlook, with revenues expected at $271 million, which is $2 million below analyst expectations. Citron addressed this in its post, saying, “The market sold off a $5 billion company over a rounding error.”
Shares of SentinelOne were down 1.64% on Thursday, closing at $14.99, but are up 0.60% overnight. The stock does poorly on Momentum and Growth in Benzinga’s Edge Stock Rankings, with an unfavorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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