SentinelOne Acquisition Bolsters AI Offering: Jefferies

SentinelOne's acquisition of Prompt Security strengthens its AI offering, says Jefferies analyst Joseph Gallo. The deal represents 4%-5% of SentinelOne's current enterprise value and is unlikely to provide material annual recurring revenue. Jefferies views AI as a "must win category in cyber" and maintains a Buy rating on SentinelOne with a $23 price target. The stock is down 4% to $17.70 in midday trading.

Cybersecurity company SentinelOne (NYSE: S) has announced its intention to acquire Prompt Security, a move aimed at strengthening its AI-native Singularity Platform. The transaction, which is expected to close in SentinelOne’s third quarter of fiscal year 2026, will see SentinelOne combining cash and stock to complete the deal [1].

Prompt Security is an all-in-one enterprise platform designed to secure employee AI usage and homegrown AI applications. It offers comprehensive real-time visibility, policy enforcement, and risk mitigation for generative AI (GenAI) and agentic AI in the workplace. The acquisition will enable SentinelOne to provide immediate visibility to all GenAI usage in the enterprise, secure and control employee usage of AI, and eliminate shadow AI risks [1].

The deal is part of SentinelOne’s strategy to extend its AI-native Singularity Platform to secure the rapidly growing use of GenAI and agentic AI in the workplace. Jefferies analyst Joseph Gallo commented that the acquisition represents 4%-5% of SentinelOne's current enterprise value and is unlikely to provide material annual recurring revenue. However, Gallo maintains a Buy rating on SentinelOne with a $23 price target, viewing AI as a "must win category in cyber" [2].

In the latest trading session, SentinelOne's stock was up +2.79% at $18.44, outperforming the S&P 500's daily gain of 1.47%. Over the last month, SentinelOne's shares have decreased by 2.76%, not keeping up with the Computer and Technology sector's gain of 3.41%. The company is expected to report earnings per share (EPS) of $0.03 in its upcoming earnings report, representing a 200% increase from the prior-year quarter [2].

The investment community will closely monitor SentinelOne's performance in its forthcoming earnings report and any recent revisions to analyst forecasts. The Zacks Consensus Estimates project earnings of $0.2 per share and revenue of $996.62 million for the full year, indicating a 300% and 21.32% growth from the prior year, respectively. SentinelOne currently has a Zacks Rank of #4 (Sell) and a Forward P/E ratio of 90, which is a premium compared to its industry average Forward P/E of 62.95 [2].

In midday trading, SentinelOne's stock was down 4% to $17.70. The acquisition of Prompt Security signals SentinelOne's commitment to expanding its AI capabilities and securing the growing use of AI in the workplace.

References:
[1] https://seekingalpha.com/news/4478280-sentinelone-to-buy-prompt-security-to-advance-genai-security
[2] https://finance.yahoo.com/news/sentinelone-outpaces-stock-market-gains-220002394.html