By Sam Boughedda
American cybersecurity firm SentinelOne Inc (NYSE:S) is set to report earnings after the close on Wednesday, and with its stock price down 46% in 2022, investors will be watching how it performed during its latest quarter.
Ahead of the earnings report, analysts at Morgan Stanley and BofA both provided commentary.
A Morgan Stanley analyst, who has an Overweight rating and a $40 per share price target on the stock, said in a note that positive checks and less favorable positioning lead to an attractive setup.
"Checks suggest strong demand + share gain sustaining 100% + organic ARR growth in FQ2, while trough margins are likely behind us. With one of the lowest growth adjusted EV/S multiples in software, we see a compelling entry point in S as durable topline at scale coincides with improving margins," said the analyst.
Meanwhile, a BofA analyst stated in a research note that there is a solid setup with organic annual recurring revenue and revenue growth ex-Attivo in focus.
"Organic ARR & revenue growth should drive stock reaction," said the analyst, who has a Buy rating and a $35 price target on the stock. "SentinelOne is set to report 2Q23 earnings on August 31, 2022. We expect a solid quarter and highlight several key metrics which may determine how the stock reacts to results. First, we focus on net new ARR growth. The Street estimates net new ARR to grow 83% QoQ to $85.4mn, in line with guidance for ~20% QoQ organic net new ARR growth plus an additional $35mn contribution related to the Attivo acquisition."