Evaluating SentinelOne After Recent Partnerships and a 5.8% Weekly Share Price Gain

Trying to decide what to do with SentinelOne stock right now? You are not alone. Investors have been watching the price movements with a mix of curiosity and caution. Over the last week, shares are up 5.8%, giving some much-needed relief after a tougher ride through the past year. Despite this recent boost, the longer-term story remains challenging, with the stock down 21.8% so far this year and off 32.8% over the last twelve months. Clearly, something is stirring in the cybersecurity sector, and SentinelOne is right at the center of it.

Recent industry buzz has drawn attention to several new partnerships and technology integrations that could unlock additional revenue streams for SentinelOne. News about expanded offerings and collaborations lends support to the view that the company is actively working to improve its long-term positioning among competitors. While the headlines have not always driven immediate rallies, they provide important context for understanding changes in investor sentiment and risk perception.

From a valuation standpoint, the numbers are starting to look interesting. By tallying up the data, SentinelOne comes in with a value score of 5 out of 6 on our checklist for signs of undervaluation. This is no small feat. Still, a strong numerical score is only the start. Let’s break down exactly how those valuation checks stack up, and then explore a more insightful way to read the story the numbers tell.

Why SentinelOne is lagging behind its peers

Approach 1: SentinelOne Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model examines SentinelOne's expected future cash generated by its business, projecting these values forward and then discounting them back to today's terms. This approach aims to estimate what the company is truly worth based on the money it can deliver to shareholders over time.

Currently, SentinelOne's Free Cash Flow stands at $12.3 million, serving as a baseline for analysts' forecasts. In the next five years, projections suggest a rapid ramp-up, with Free Cash Flow expected to reach $215.9 million by January 2028. Analysts supply estimates for the near term, while figures from 2029 through 2035 are extended out by Simply Wall St methodology, reflecting a continued trajectory of growth.

The DCF analysis assigns an intrinsic value of $23.17 per share. Compared to the current share price, this indicates that SentinelOne is trading at a 23.8% discount. This suggests the stock is undervalued if these cash flow assumptions hold true.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for SentinelOne.

Our Discounted Cash Flow (DCF) analysis suggests SentinelOne is undervalued by 23.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: SentinelOne Price vs Sales

For companies that are not yet consistently profitable, especially in high-growth sectors like Software, the Price-to-Sales (P/S) ratio is often a better valuation metric than earnings-based multiples. This is because revenue tends to be more stable than profits during periods of expansion and reinvestment, helping investors gauge how much the market values each dollar of sales.

The "right" P/S multiple can depend on several factors, including overall growth expectations, business risk, and profitability trends. In fast-growing industries, higher P/S ratios are common since investors are willing to pay more for future potential. Conversely, higher risk or stagnating growth would pull the fair P/S lower.

SentinelOne currently trades at a P/S ratio of 6.5x. This compares to a peer average of 9.5x and an industry average of 5.2x. The Simply Wall St proprietary Fair Ratio for SentinelOne stands at 7.2x, which considers not only sector benchmarks but also the company's specific growth outlook, profit margins, risk profile, and market cap.

The Fair Ratio is a more useful gauge than industry or peer comparisons alone. It provides a custom benchmark that layers in vital company-specific and market context, giving a truer sense of intrinsic value.

Comparing SentinelOne's current P/S of 6.5x to the Fair Ratio of 7.2x suggests that the stock is currently undervalued on a sales basis.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your SentinelOne Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is more than just numbers; it is your story or viewpoint about a company, supported by your own assumptions on future revenue, margins, and ultimately fair value. Narratives let you connect SentinelOne’s business journey, strategic moves, or risks directly to your financial forecasts, making your investment decision both personal and data-driven.

This approach is easy to use and available to everyone within the Community page on Simply Wall St, where millions of investors track and update their Narratives in real time. By setting your own Narrative, you compare your calculated Fair Value to SentinelOne’s current share price and can decide whether it's time to buy, hold, or sell. Your forecast and fair value automatically update as new earnings and news emerge, keeping your perspective current.

For example, some investors on Simply Wall St have a bullish Narrative with a $30 fair value, drawing on optimism for AI-driven expansion and global partnerships. Others are more conservative, setting their fair value closer to $19 due to concerns over margin pressure and industry risks. Narratives give you a living, customizable way to clarify what you believe and act on it with confidence.

Do you think there's more to the story for SentinelOne? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com