SentinelOne Inc’s stock fell 6.7% to $21.19 on Friday after the cybersecurity company posted mixed quarterly results and provided guidance that trailed analyst expectations.
The company reported Q2 FY2027 revenue of $292 million, up 21% year-over-year and exceeding estimates. Annual recurring revenue (ARR) reached $1.218 billion, a 22% increase, while remaining performance obligations (RPO) climbed 45% to $1.7 billion. Non-GAAP operating margin expanded to a record 10%, up 820 basis points from the prior year. Full-year operating income guidance was raised to $124 million–$128 million.
However, SentinelOne’s Q3 FY2027 earnings per share (EPS) guidance of $0.08–$0.09 fell short of the $0.11 consensus estimate. Free cash flow came in at negative $13.2 million, compared with a consensus estimate of negative $1.5 million, primarily due to severance-related costs.
The company’s net new ARR totaled $56 million, marking the fifth consecutive quarter of positive growth. Platform diversification continued, with non-endpoint products—including cloud security, data/AI SIEM, and AI security—now accounting for over 50% of total ARR. Purple AI’s ARR tripled year-over-year, with customers reporting a validated 338% three-year ROI. Prompt Security, the fastest-growing product, secured Bell Canada as a customer.
Sales and marketing efficiency improved to 34% of revenue, a 900-basis-point increase from the prior year. SentinelOne’s market capitalization stands at $7.24 billion, while the average street target price is around $24, implying roughly 13% upside to consensus.
Analysts remain broadly bullish, with 21 buy ratings, 13 hold ratings, and one sell rating. Recent target adjustments include Scotiabank raising its price target to $26 from $23.50 and Citizens lifting its target to $25 from $23. The next earnings release is scheduled for December 8, 2026, with the street expecting $309.4 million in revenue and $0.11 EPS.
