QS Research · Michael Burry's Scion Capital analyst template · 2006
SentinelOne, Inc. (S)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +0% · downside -25% · upside +47%
SentinelOne is not a classic deep-value asset: TTM revenue is $1.10B and EV/Sales is 6.17x, but EBIT is -$323.7M, net income -$340.1M and FCF only $56.5M (0.8% FCF yield), while TTM buybacks of $147.3M exceed FCF. The market is paying for 21-22% growth and improving non-GAAP operating leverage, not current GAAP earnings; cash/ST investments were $655.2M at 2026-07-31, but the 2026-10-16 $1.25B 0.00% convertible notes are a new balance-sheet claim to check pro forma. At today's 6.17x EV/Sales the base value is essentially today's $21.77, while the downside to Check Point's 4.49x is about -25% and the upside to Zscaler's 9.34x is about +47%. The rule is not met because the base case is not +30%, so this is a watch, not a long or short; the dated 2026-08-27 guidance raise and 2026-10-16 convertible issue are the only reasons I let scenario multiples move from today's 6.17x.
Key numbers
- Share price: $21.77
- Market cap: $7.44B
- Latest financial period: TTM to Jul 31, 2026
- Revenue (TTM): $1.10B
- Price / book: 5.13x
The 15 boxes
- ✓ 1. Long-form business notes
SentinelOne's FY2026 (ended 2026-01-31) 10-K shows revenue of $1,001.3 million versus $821.5 million in FY2025 (+22%), up from $204.8 million in FY2022 and $93.1 million in FY2021 — rapid growth decelerating sharply from the 120% booked in FY2022. The operating trend improved (operating loss $321.3 million in FY2026 versus $329.4 million in FY2025; pre-tax loss $279.7 million versus $281.6 million) and operating cash flow turned positive and rose to $76.6 million from $33.7 million, but the reported net loss widened to $450.7 million from $288.4 million, so the FY2026 bottom line is driven by items below the pre-tax line, not by operating deterioration. The business itself has been re-labeled and re-scoped between FY2022 and FY2026: from an 'AI-powered XDR platform' on the proprietary DataSet stack to an autonomous-defense platform built on Singularity Data Lake with generative AI (Purple AI), AI-SIEM and the September 2025 Prompt Security and Observo AI acquisitions.
- ✓ 2. Competitive advantage
SentinelOne has real scale and some technology/IP differentiation, but the sources do not establish a durable competitive advantage. Revenue reached $1.00B and gross profit $742.1M in the fiscal year ended 2026-01-31, while operating income was -$321.3M and net loss $450.7M; operating cash flow was positive at $76.6M. It competes with CrowdStrike, Microsoft, Palo Alto Networks, Cisco/Splunk and others, and its own risk factors cite larger competitors with greater resources, name recognition and customer bases.
- ✓ 3. 10-Q takeaways
Q2 FY2027 (quarter ended July 31, 2026) showed 21% revenue growth to $292.0M, ARR up 22% to $1,218.1M and 13% more $100K+ ARR customers (1,715), but GAAP gross margin fell to 72% from 75% on cloud and support costs and the GAAP net loss widened to $93.4M from $72.0M, largely because of a $24.4M May 2026 restructuring charge that included $10.8M of accelerated stock-based compensation. Non-GAAP operating income was $30.5M (10% margin) versus $5.4M (2%), and management raised FY2027 revenue and non-GAAP operating income guidance. Cash and investments rose to $813.2M at July 31, 2026 from $769.6M at January 31, 2026, while six-month operating cash flow fell to $31.9M from $51.2M.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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