Cybersecurity Ventures predicts $9.5 trillion in 2024 cybercrime costs. According to McKinsey & Company, corporations will spend $213 billion on cybersecurity this year, significantly less than the $2 trillion they should. Not having cyber protection costs businesses more on average. The spending disparity may shrink as cybercrime costs skyrocket.
SentinelOne (NYSE: S) will profit if that happens. It's a cybersecurity business that uses AI and grows quicker than its competitors. SentinelOne stock may be worth buying and holding for the long run.
Palo Alto Networks reported a tenfold spike in phishing emails in the past year. Attackers are employing generative AI to quickly create convincing material to fool employees into disclosing vital company data. A recent PwC survey confirms that. Generative AI cyber hazards concern 64% of 4,702 top CEOs. Misinformation and technology's reputational concerns pale in comparison to that worry.
Defense against AI-powered threats requires automated cybersecurity technologies. Singularity is SentinelOne's AI-powered cloud, endpoint, and identity protection technology. The company's narrative technology automatically summarizes security incident data throughout the enterprise and provides managers with relevant insights. It lowers alert fatigue, a major issue in the business as security administrators struggle to keep up with occurrences
SentinelOne's Purple AI solves it also. It is a cybersecurity stack-integrated AI virtual assistant. It can answer queries, dive down on concerns, and execute preventative assessments for new dangers. Purple AI can save cybersecurity managers hours of manual investigation, reducing incidents missed
SentinelOne is outgrowing its rivals. SentinelOne earned $174 million in fiscal Q4 2024 (ending Jan. 31), up 38% year over year. That outpaced Palo Alto Networks (19%) and CrowdStrike (33%), which reported slower growth. Both are SentinelOne's largest AI-based cybersecurity competitors.
However, SentinelOne's lower size makes growing easier. Revenue was $621 million in fiscal 2024, above management's latest guidance. Palo Alto had $7.5 billion in trailing-12-month revenue, and CrowdStrike made $3.1 billion last fiscal year
Other caveat: SentinelOne's bottom line. In fiscal 2024, the company lost $339 million, but on a non-GAAP basis, it lost $81 million; this excludes stock-based compensation. Due to their size and scale, Palo Alto and CrowdStrike are profitable both GAAP and non-GAAP.
SentinelOne invests more in growth than its competitors despite losing money. The corporation can cover its losses for a few years because it has $926 million in cash and short-term investments. SentinelOne must eventually show investors it can profit.
Why buy SentinelOne now SentinelOne stock is 71% below its 2021 tech craze high, when investors overvalued it. SentinelOne shares trade at a 10.6 price-to-sales (P/S) ratio based on its $621 million fiscal 2024 revenue and $6.6 billion market cap.
At 26.6 P/S, CrowdStrike stock is 2.5 times more expensive. Palo Alto's P/S ratio is 13.4, making it more expensive than SentinelOne despite its twice- as-fast revenue growth. At the end of 10 years, SentinelOne stock investors may be glad they bought now. That decade should decrease the industry's $1.8 trillion spending gap and allow corporations to turn their generative AI anxieties into cybersecurity investments.
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