If legacy Anti-Virus (AV) represents the past and End-point Detection and Response (EDR) is the present, then Extended Detection and Response (XDR) is the future. And SentinelOne is a pioneer of the next generation of cyber security.
Here, I’ll share my thoughts on SentinelOne’s business, their latest FY21 earnings and my takes as an investor. If you prefer to learn via video, here’s my presentation:
But first, here’s an overview:
SentinelOne’s Singularity XDR Solution
SentinelOne established the foundations of XDR by pioneering the world’s first purpose-built AI-powered, autonomous cyber security platform.
XDR builds on the core functions of EDR to extend the protection beyond the endpoints (end-user devices like laptops, desktops, tablets and phones that AV can’t detect) to also monitor data from networks, cloud workloads, servers, emails etc.
SentinelOne is not a market leader yet
That said, they are not a leader yet, though SentinelOne is a strong performer in this space, behind Trend Micro and Microsoft.
SentinelOne is relatively small in size but shows good potential to grab market share from in the cyber security End Point Protection (EPP) space.
Strong growth and good execution of sales strategy
Their FY2022 results shows that they are a fast-growing company that is executing their sales strategy well which can be seen from these key metrics:
- Annualized Recurring Revenue (ARR) grew 123% year-over-year to $292 million
- Total customer count grew by more than 70% year-over-year to over 6,700 at quarter-end.
- Customers with ARR over $100K grew 137% year-over-year to 520.
- Dollar-based net revenue retention rate was 129%.
- Non-GAAP operating margin improved, was -85%, compared to -107% in fiscal 2021.
SentinelOne’s forward price multiple
- Market cap: $10.38B ($38.22)
- Revenue guidance year 2022: $370m (81% growth)
Based on their forward Price/Sale multiple of 28x, SentinelOne is not expensive considering that they are one of the fastest growing companies in the tech space currently.
Top SaaS companies are reasonably priced now
Looking at how much Enterprise Value/Next Twelve Months Revenue Multiples have come down in recent months, the top SaaS companies are at a more reasonable price to invest today.
I share how I pick hypergrowth SaaS stocks and find highly discounted opportunities in today’s markets. Join me at my next webinar.
Disclaimer: I’m vested in SentinelOne
