This article is not intended to present any view on the likely course of the economy. Industrial commodity prices are falling as the Chinese economy contracts. There are certainly cross currents when it comes to inflation as should be expected at times of a step down in inflationary pressures the other day, Walmart announced it was cutting wages for less skilled entry level staffers. In the last few days, investor concern regarding economic macros and in particular the state of the labor market and indications of inflation as evinced by the spike in oil prices and the report of the ISM services have led to a return to risk-off sentiment. I think a balanced portfolio strategy is likely to best serve investors in this space-although to be sure, I think individual stocks can do better than cybersecurity ETFs such as ( HACK). There is not going to be a single winner in cybersecurity-that is true today and it will be true in the foreseeable future. And so far as it goes, I also own and recommend shares of Zscaler ( ZS). I also own and recommend CrowdStrike ( CRWD) even though Sentinel and CrowdStrike are competitors in the same space with not much good to say about each other. I am recommending and own a position in Sentinel One. There is a tendency amongst some SA authors, and other analysts to think it necessary to choose one cybersecurity company as a focus when investing in the space. And its generative AI offering, Purple, continues its path to general availability. Its platform strategy has continued to evolve, with some evidence of acceleration. While no doubt the company still faces intense competition and probably has not entirely remediated its go-to-market motion, there is visible progress in those areas of concern. Its forecast is deliberately conservative but shows stronger growth in ARR than previously forecast. Its path to profitability continues with more substantiation, and it cash burn has diminished to a low level. The company no longer has a challenging EV/S ratio in the context of its growth rate. I am reiterating my purchase recommendation here at the current price of around $17/share. The net result has been a modest share price increase as those traders speculating on a sale are likely exiting their positions, while investors looking at results will find a bargain valuation. But the CEO denied the company was for sale, and said that none of the company's financial advisors expects a sale. A small company, Wiz, who has been a partner of Sentinel, expressed interest in acquiring Sentinel, despite Sentinel being far larger in terms of just about every metric that can be used to measure size.Īnd now, the company has reported financial results that were noticeably greater than forecast, and its new forecast is showing faster growth than the company had previously projected. A couple of months later a rumor emerged that the company had engaged an investment banker and was potentially looking to sell itself. Needless to say the shares gapped down -they fell by as much as 40% in the two sessions after the earnings report before bouncing a little. The timing wasn't great the company soon thereafter announced a guide down, spoke about macro headwinds and sales execution issues, and had to recalibrate it ARR calculation. I wrote an article about SentinelOne and its outlook ( NYSE: S) just a few months ago. Anyaberkut/iStock via Getty Images Cybersecurity - There is more than a single winner
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