Despite the revenue beat, analysts downgraded the stock, citing deal delays, lowered forecasts, and concerns over growth and profitability.

Shares of cybersecurity firm SentinelOne Inc. (S) declined over 13% in Thursday’s premarket session after the company posted a worse-than-expected annual recurring revenue (ARR) and outlook.

The firm’s first-quarter (Q1) revenue grew 23% to $229 million, marginally exceeding the analysts’ consensus estimate of $228.4 million, per Finchat data. ARR was 948.1 million, up 24%.

The adjusted earnings per share (EPS) of $0.02 matched the consensus estimate. SentinelOne expects FY26 revenue of $996 million to $1.001 billion, down from the previous guidance of $1.007 billion to $1.012 billion. 

Wells Fargo analyst Andrew Nowinski downgraded SentinelOne to ‘Equal Weight’ from ‘Overweight’ and lowered the price target to $18 from $22 following the Q1 results, as per TheFly. 

In a research note, Nowinski explained that the company’s net new annual recurring revenue fell short of expectations due to delayed deals. 

The firm believes SentinelOne has lost momentum in capturing strong net new ARR growth. Although demand picked up in May and some previously delayed deals closed, management still projected a 16% year-over-year decline in net new ARR, Wells Fargo noted.

BofA analyst Tal Liani downgraded the stock to ‘Neutral’ from ‘Buy’ and cut the price target to $21 from $24, citing what the firm described as "a mixed quarter." 

In a post-earnings note, the analyst said recent results have lacked momentum, with two straight quarters of lowered guidance.

Liani also pointed out that while SentinelOne is growing at a pace similar to CrowdStrike (CRWD), it does so with roughly 80% less revenue and about 650 basis points lower profitability when adjusted for scale.

Barclays reduced its price target on SentinelOne to $19 from $21 while maintaining an ‘Equal Weight’ rating on the stock. 

The brokerage explained that net new annual recurring revenue totaled $28 million, falling short of its $32 million projection, largely due to weaker-than-anticipated performance in April.

Other brokerages, including UBS, Bernstein, BTIG, JP Morgan, and Deutsche Ban,k also lowered SentinelOne’s price target.

On Stocktwits, retail sentiment around SentinelOne remained in ‘ extremely bullish’ territory.

S's Sentiment Meter and Message Volume as of 08:15 a.m. ET on May 29, 2025 | Source: Stocktwits

A Stocktwits user argued Q1 was not a terrible quarter.

Another bullish user is planning to buy the dip.

SentinelOne stock has lost over 11% year-to-date and 5% in the last 12 months.

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