Canaccord Genuity (TSX:CF, LSE:CF) analysts have initiated coverage on SentinelOne Inc, a next-gen Endpoint Security platform vendor powered by artificial intelligence (AI), with a ‘Buy’ rating and US$20 price target.
Shares of SentinelOne were trading up 2% at noon on Thursday at US$16.07.
In a note to clients, the analysts wrote that SentinelOne’s differentiated technology has enabled it to join the race as one of the next-gen technology leaders in Endpoint Security, a market expected to grow to about $12 billion in 2024.
They noted that as the big three legacy vendors in this fragmented market continue to lose market share, they believe SentinelOne has accelerated its leadership position since going public in 2021.
“We view SentinelOne as a long-term secular winner due to the company’s positioning as a data-driven security platform, which is facilitated by its roots in Endpoint Security and a strong position in the midmarket enterprise market,” the analysts wrote.
“While the company remains unprofitable given ongoing investments and lower scale, we believe non-GAAP break-even operating profitability is achievable in F2025E.”
The analysts highlighted that the platform’s superior autonomous AI engine, unified back end, and data analytics capabilities enable it to ingest, analyze, and correlate a broader data set, improving detection, prevention, and remediation outcomes.
These factors in turn enable the company to expand into tangential segments to capture a greater share of customers’ IT budgets, they wrote.
“With global enterprises inhibited by resource constraints, we strongly believe increased automation with little to no human intervention is a clear advantage against modern adversaries,” the analysts wrote.
“As a result, we anticipate long-tailed adoption driving sustained revenue growth, and with leverage in the model we believe the company has a clear path to achieving strong long-term profitability.”
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