TLDR
- SentinelOne’s Q4 FY2026 revenue reached $271.2M, marking a 20% year-over-year increase and meeting analyst expectations.
- The cybersecurity company achieved a major milestone by surpassing $1 billion in annual revenue, while ARR expanded 22% to $1.119B.
- Fourth-quarter net new ARR hit a record $64M, and non-GAAP EPS of $0.07 exceeded the consensus estimate of $0.06.
- Forward-looking revenue projections for FY2027 of $1.195B–$1.205B and Q1 forecast of $276M–$278M fell short of market expectations.
- Scotiabank reduced its price target to $15 from $17, expressing concerns about constrained investment spending and limited visibility on major customer acquisitions.
SentinelOne (S) reported strong fourth-quarter performance, yet shares declined as the company’s future outlook failed to meet investor expectations.
The enterprise security platform provider announced Q4 fiscal 2026 revenue of $271.2 million, representing a 20% year-over-year increase. This figure aligned nearly perfectly with Wall Street’s consensus projection of $271.17 million. The company’s non-GAAP earnings per share registered at $0.07, surpassing analyst expectations by one cent.
For the complete fiscal year, revenue totaled $1,001.3 million — representing 22% growth and marking the company’s inaugural crossing of the billion-dollar revenue threshold.
Annual recurring revenue expanded 22% to reach $1,119.1 million as of January 31. The company added $64 million in net new ARR during Q4, which management highlighted as a quarterly record.
The quarter also featured a strategic partnership announcement with Cloudflare, representing one of the more significant customer engagements the company has publicly shared in recent months.
Nevertheless, shares tumbled approximately 4% during premarket trading. The culprit: forward-looking projections.
Guidance Disappoints
SentinelOne issued Q1 fiscal 2027 revenue guidance between $276 million and $278 million, which approximated consensus forecasts. However, the full-year revenue outlook of $1.195 billion to $1.205 billion sparked concern among market watchers.
The company also forecasted non-GAAP operating income between $110 million and $120 million for the full year, reflecting its ongoing march toward sustained profitability. Notably, this projection exceeds analyst consensus estimates.
Scotiabank adjusted its price target downward to $15 from $17, maintaining a Sector Perform rating. The bank characterized the Q4 performance as “solid” but indicated it remains cautious on the stock.
The firm noted that SentinelOne’s guidance suggests minimal deceleration in growth during fiscal 2027. Additionally, Scotiabank highlighted that the company has historically raised its initial guidance in each of the previous three years — potentially indicating the current forecast may be deliberately conservative.
Analyst Views Split
Not all analysts share a pessimistic outlook. 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 but lowered its price target to $18 from $21. The firm expressed concerns regarding the Q1 net new ARR capture rate embedded within the guidance framework.
Scotiabank’s primary concern extends beyond the reported figures — it centers on strategic execution. The bank suggested that constraining investment expenditures could potentially hamper revenue expansion in future periods.
The firm also indicated it hasn’t uncovered evidence, through its executive channel checks, that SentinelOne is securing additional major customer wins beyond the Cloudflare partnership.
At the time Scotiabank published its research note, shares were trading at $13.78, falling below even the bank’s reduced $15 valuation target.
InvestingPro data indicates analysts project earnings of $0.19 per share for fiscal 2027, which would represent the company’s inaugural full-year profitability achievement. Current valuations suggest the stock is undervalued relative to these projections.
SentinelOne has demonstrated a pattern of raising guidance throughout the past three years, which certain analysts interpret as an indication that current forecasts may be deliberately conservative. Scotiabank, however, requires evidence of additional major deals before adopting a more bullish stance on the security firm.
