SentinelOne (NYSE:S) will hand down its first quarter earnings this week, with Jefferies analysts raising their price target on the cybersecurity ahead of the report, citing improving longer-term growth visibility and margin expansion potential.
The firm lifted its price target to $24 from $20, pointing to what it sees as an attractive valuation at roughly 4.5 times estimated calendar 2027 revenue and expectations for stronger profitability in the second half of the fiscal year. Shares currently trade at about $19.
For Q1, consensus forecasts are calling for SentinelOne to report $41 million in net new annual recurring revenue (NNARR), representing about 24% year-over-year adjusted growth, according to Jefferies. The firm wrote that stronger-than-seasonal survey data could help the company reach an investor target of roughly $43 million to $44 million in NNARR.
While Jefferies described the Q1 setup as “not the easiest,” analysts said underlying cybersecurity demand trends remain healthy. They added that SentinelOne has narrowly missed first-quarter ARR consensus expectations in each of the past two years, contributing to a more cautious tone heading into the report.
The first half of fiscal 2027 could remain pressured after management indicated around 50% of annual NNARR is expected to come in the first half of the year, compared with 42% in the prior-year period after adjustments for acquisitions and certain churn impacts.
Regardless, Jefferies wrote that the broader fiscal 2027 growth path appears easier, with current consensus estimates implying a slowdown in NNARR growth relative to fiscal 2026 levels. The analysts said that could leave room for SentinelOne to outperform expectations if endpoint security demand remains stable and adoption of newer products continues to grow.
AI-related offerings are also expected to be a key focus for investors during the earnings call. Jefferies highlighted momentum in Prompt Security, SentinelOne’s AI security offering, which more than doubled ARR sequentially in the prior quarter. The firm said investors will likely look for further updates on AI security deal activity and competitive positioning.
Margins are another area being closely watched. Consensus estimates call for a non-GAAP operating margin of 2.3% in the first quarter, up about four percentage points from a year earlier.
Jefferies expects margin expansion to accelerate later in the year, supported by operational efficiencies, AI-driven productivity gains and leadership from the company’s new chief financial officer.
SentinelOne will report its Q1 earnings on May 28.