By Akash Sriram
(Reuters) - SentinelOne (NYSE:S) surged nearly 14% on Wednesday after a strong quarterly revenue forecast signaled its entry into the cybersecurity big leagues, challenging larger rivals like Microsoft (NASDAQ:MSFT) and CrowdStrike (NASDAQ:CRWD).
The stock hit a more than one-year high and could add nearly $1 billion in value if gains hold, topping up a rise of about 37% notched for the year so far.
SentinelOne's consolidated platform for enterprise customers as well as the competitive advantages of its Data Lake product are among the top factors behind its growth and rising customer base, analysts have said.
Its efforts to tap growing demand for security services focused on end-user devices such as laptops and smartphones are also paying off.
"We view SentinelOne as an emerging challenger in the endpoint security space, a prominent part of the cybersecurity stack that has been dominated by larger competitors such as Microsoft and CrowdStrike," Morningstar analysts said in a note.
SentinelOne has also rolled out products such as the generative AI-powered Purple AI and Singularity platform to help plug vulnerabilities that come with the rising digital presence of businesses.
"We continue to win a significant majority of competitive evaluations against both next-gen and legacy endpoint providers," said CEO Tomer Weingarten (NYSE:WRI).
D.A. Davidson analysts said Data Lake, a data collection and investigation product, offers notable cost savings and superior speed than rival Splunk (NASDAQ:SPLK), which is set to be bought by Cisco (NASDAQ:CSCO) for $28 billion.
At least eight brokerages raised their price targets on SentinelOne, with an average rating of "buy" and median target of $20, in line with closing prices before its results on Tuesday.
SentinelOne forecast fourth-quarter revenue of $169 million and projected $616 million in annual sales, both surpassing estimates, according to LSEG data.
The stock has a 12-month forward price-to-sales ratio - which measures valuation - of 7.7, compared with larger rival CrowdStrike's 15.1 and 10.7 for Microsoft, whose operations also include endpoint security.