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SentinelOne's After-Hours Stock Decline Presents Attractive Entry Point, BofA Says

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SentinelOne (S) reported an in-line but solid fiscal Q1, and the stock's 18% after-hours decline presents an attractive buying opportunity, BofA Securities said Friday.

SentinelOne reported a fiscal Q1 operating margin of 4% versus consensus of 2%. BofA sees a path to 8.2% in fiscal Q2 and 10% in fiscal 2027, in-line with guidance, driven by scale and improved cost discipline, according to the note.

Guidance remained largely unchanged, with full-year and near-term revenue outlook maintained, while operating margin guidance rose modestly to about 10%, reflecting the fiscal Q1 upside, the brokerage added.

This conservatism weighs on the stock and raises concerns about growth durability and deal timing, and the analysts also noted the historical volatility in billings and deferred revenue trends, according to the note.

BofA said it takes a more positive view given strong underlying trends, and sees this as a prudent posture and expectations reset under a new CFO, rather than a reflection of management's concern over weakening underlying demand.

BofA upgraded SentinelOne to buy from neutral and raised the price target to $20 from $16.

Shares of SentinelOne dropped more than 12% in Friday trading.

Price: $15.87, Change: $-2.15, Percent Change: -11.93%

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