1 Artificial Intelligence (AI) Growth Stock Down 77% to Buy Hand Over Fist, According to Wall Street

Human cybersecurity managers are struggling to handle the high frequency of incidents in an increasingly digital world, but artificial intelligence (AI) can reduce alert fatigue to ensure fewer threats slip through the cracks in even the most complex organizations. SentinelOne (NYSE: S) developed a holistic cybersecurity platform called Singularity, which protects cloud networks, employee identities, and endpoints, with AI-powered automation at its core.

SentinelOne stock is down 77% from its all-time high, which was set during the tech frenzy in 2021. Its valuation reached unsustainable heights back then, but it's starting to look like a good value relative to some of its competitors.

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Wall Street appears to agree. The majority of the analysts tracked by The Wall Street Journal have assigned SentinelOne stock the highest possible buy rating, and not a single one recommends selling. Here's why the Street's optimism might be justified.

Image source: Getty Images.

SentinelOne just introduced agentic AI for cybersecurity

SentinelOne believes AI can respond to threats much faster than human managers, which is why it's at the core of the company's Singularity platform. It works around the clock to autonomously protect customers, and in situations where human intervention is required, the Storyline feature crafts detailed incident summaries to save hours of manual investigative work. Then, in the event of a successful hack, one-click remediation allows managers to instantly roll networks back to their pre-breach state.

SentinelOne launched a powerful virtual assistant called Purple AI in 2024, which is embedded into Singularity to speed up workflows and turn every employee into a cybersecurity expert. But in April of this year, the company released a major upgrade called Purple AI Athena, transforming it from an assistant into a proactive agent that can make its own decisions.

Athena uses advanced reasoning to identify, analyze, and remediate incidents on its own, which reduces the need for human intervention even further than Singularity already does. SentinelOne says this is an industry first, so it could help the company capture market share from its competitors.

But SentinelOne was already a leader on the technological front. In last year's MITRE ATT&CK Evaluations, which measure the effectiveness of leading cybersecurity platforms, Singularity detected threats with 100% accuracy, and in real time with zero delays. It also produced 88% less noise compared to the median result from all vendors, which means there were significantly fewer alerts that required human attention.

Steady revenue growth, but there is uncertainty ahead

SentinelOne generated a record $229 million in revenue during its fiscal 2026 first quarter (ended April 30), which was a 23% jump from the year-ago period. Although that's a strong increase at face value, it marked a notable deceleration from the 29% growth the company delivered in the previous quarter three months earlier.

Plus, following the Q1 result, management reduced its full-year revenue guidance for fiscal 2026 by around 1%, to $998.5 million (at the midpoint of the forecast range). CEO Tomer Weingarten cited macroeconomic uncertainty as the primary reason. He said SentinelOne hasn't necessarily lost any deals, but customers paused some spending decisions following President Donald Trump's "Liberation Day" tariff announcement in early April.

The import levies primarily affect physical products, so SentinelOne isn't directly impacted. But its cybersecurity solutions serve customers in a wide range of industries, and if their businesses suffer a slowdown, it will affect how much they can spend on protection. The uncertainty isn't going away anytime soon -- Trump's tariffs were struck down in federal court last week, only to be reinstated on appeal, and this back-and-forth will make businesses even more skittish about their spending.

SentinelOne stock is much cheaper than its peers

The Wall Street Journal tracks 39 analysts who cover SentinelOne stock, and 23 of them have assigned it the highest possible buy rating. Three others have given the stock an overweight (bullish) rating, and the remaining 13 recommend holding -- none advise selling.

The group of analysts have an average price target of $23.26, implying SentinelOne stock could climb by 33% over the next 12 to 18 months. But the Street-high target is $36, suggesting a potential upside of 107% instead.

SentinelOne's valuation might be one of the reasons Wall Street is collectively bullish. Its stock was trading at a sky-high, unsustainable price-to-sales (P/S) ratio of around 100 in 2021. But the 77% decline in the stock since then, combined with the company's continued revenue growth, has pushed its P/S ratio down to just 6.4 as of this writing.

That's a steep discount to some of the other leaders in AI-powered cybersecurity, including CrowdStrike, Zscaler, and Palo Alto Networks:

PS Ratio data by YCharts

SentinelOne is the smallest vendor of the group. It has slightly under $1 billion in annual recurring revenue (ARR), compared to around $4.2 billion for CrowdStrike, for example. Scale is important when it comes to AI -- more customers equal more data, which means "smarter" models over time and better overall protection. Therefore, SentinelOne's relatively small market share might be one reason investors aren't paying up for its stock.

However, the MITRE ATT&CK Evaluation results I highlighted earlier suggest SentinelOne is holding its own from a technological standpoint. Plus, I don't think cybersecurity is a winner-take-all market -- SentinelOne believes it has a $100 billion addressable opportunity, of which it has barely scratched the surface based on its current revenue.

As a result, Wall Street's bullish tone might be justified, so SentinelOne stock could be a great long-term addition to any diversified portfolio.

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike and Zscaler. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.