Is SentinelOne Stock a Buy After the Stock Tumbled?

SentinelOne (NYSE: S) shares tumbled after it reported its fiscal first-quarter results, as investors worried about guidance and company-announced layoffs. However, the stock was able to recoup some of its losses and is still up around 12% on the year, as of this writing.

Let's dig into the cybersecurity stock's recent quarterly results to see if investors should buy the dip.

Strong revenue growth continues

SentinelOne saw its revenue growth accelerate in Q1 fiscal year 2027, climbing 21% to $276.7 million, up from 20% growth in Q4. That came in toward the middle of its $276 million to $278 million guidance projection. Adjusted earnings per share (EPS), meanwhile, doubled from $0.02 to $0.04 and came in above its guidance of $0.01 to $0.02.

Annual recurring revenue (ARR), which is the annualized value of its customer subscription and consumption-based contracts, also accelerated, increasing by 23% to $1.163 billion. It added net new ARR of $44 million in the quarter, up 55% year over year. Meanwhile, the number of customers with ARR of $100,000 or more increased by 17% to 1,702.

Following competitors, the company's flexible, consumption-based licensing model is gaining traction, with total contract value crossing $200 million in its first three quarters since launch. AI security ARR, meanwhile, nearly doubled in the quarter.

Turning to guidance, the company projected fiscal Q2 revenue between $289 million and $291 million, which would equate to around 20% growth. It expects adjusted EPS to be between $0.06 and $0.08. For the full year, it maintained its guidance for revenue in the range of $1.195 billion to $1.205 billion, representing 20% growth. It projected adjusted EPS of $0.32 to $0.38.

The company also announced it will lay off about 8% of its workforce, which will result in $45 million in annual cost savings.

Image source: The Motley Fool.

Is it time to buy the dip?

SentinelOne continues to show solid growth that is similar to or better than its endpoint security peers CrowdStrike and Palo Alto Networks, but its guidance did not indicate that it was seeing the same type of growth acceleration as its larger rivals. Nonetheless, investors can pick up a cybersecurity stock with 20% revenue growth trading at a forward price-to-sales (P/S) multiple of under 5 times analysts' estimates, versus 30 times for CrowdStrike and 20 times for Palo Alto. While it shouldn't trade at the same multiple as its larger peers, the gap is insanely wide in my view.

As such, I'd pick up shares of this still solidly growing cybersecurity stock while it's on sale.

Geoffrey Seiler has positions in SentinelOne. The Motley Fool has positions in and recommends CrowdStrike and SentinelOne. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.