SentinelOne to Boost Cloud Security Capabilities with PingSafe Acquisition

SentinelOne (S), a global leader in AI-powered security, has recently announced its acquisition of PingSafe, a cloud native application protection platform (CNAPP). By combining PingSafes capabilities with SentinelOnes existing cloud workload security and cloud data security offerings, the company aims to provide organizations with a fully integrated platform that enhances coverage, hygiene, and automation across their entire cloud footprint.

 The integration of PingSafes CNAPP into SentinelOnes Singularity Platform brings about a significant paradigm shift in cloud security. Instead of relying on disparate point solutions or standalone cloud security platforms, companies can now leverage a unified security platform that utilizes AI-powered security operations to safeguard their entire enterprise, including endpoints, identities, and clouds.

 SentinelOne has been actively expanding its cloud security capabilities beyond cloud workload security, and the acquisition of PingSafe accelerates this strategic initiative. This move aligns with the companys Singularity Unity Release strategy, which aims to transform security operations centers. 

PingSafes CNAPP solution has received positive feedback from customers who view it as superior to alternative solutions in the market. One such customer is Razorpay, one of Indias largest payment processors, which handles over $100 billion in transactions. 

Prior to the news, WestPark, a reputable financial firm, raised its estimates for SentinelOnes performance in FY24, projecting revenues of $617 million and a loss of 0.27 for the year. Looking ahead to FY25, WestPark forecasts revenues of $779.3 million and breakeven earnings per share (EPS) at $0.00. 

Based on a strong Q3 performance and a positive outlook for Q4, WestPark upgraded its rating on SentinelOne to Buy from Hold. WestPark employs a reasonable peer Price to Sales multiple of 12x and applies it as a target multiple for SentinelOne. This valuation approach suggests a price target of $31.

The $31 price target is notable as the stock rallied to $27.96 on December 22 before rolling over. There were no buyers above the $28 level and now the stock is caught up in some of the broad market selling pressure that has been the early 2024 theme. 

The stock has tumbled 15% since 12/22 and saw accelerated selling as it fell below the 20-day moving average ($25.76) following news of the acquisition. We were not made privy to some of the details of the acquisition but there does appear to be some concern that the price tag may be too high. Especially when investors want to see the company breakeven in 2025. 

The valuation remains frothy at 12x price to sales but the pullback offers investors a chance to pick it up at a cxheaper level. The "Gap Up" support from December 6 ($22.30) looms as a an extremely important support level for the stock. Investors want to see that level hold. 

 Right now it sets up as a good entry point as traders could place stops just below that support level. 

SentinelOnes acquisition of PingSafe and the integration of its CNAPP solution into the Singularity Platform represents a significant advancement in cloud security. This move enables companies to access a unified and comprehensive security. 

 (Note: The information provided in this article is based solely on the given information, without additional technical analysis or market data.)$S(S)