Motley Fool spotlights cybersecurity firm SentinelOne as AI stock to buy on the dip

The Motley Fool has spotlighted mid-cap cybersecurity company SentinelOne as a "no-brainer" AI stock to buy while on the dip. It still trades far below its 2021 high and at some of the cheapest valuations in its sector, even though the company is expanding faster than peers.

Investors should take a closer look at SentinelOne stock, which could be a solid long-term addition to a diversified portfolio, according to Motley Fool tech contributor Anthony Di Pizio. The company’s shares have plunged 75% from their 2021 peak and now trade at $18.86 per share. The stock is down 15% since the start of 2025, but Wall Street still sees potential, Di Pizio notes.

SentinelOne also looks attractively valued. At its 2021 peak, the price/sales ratio exceeded 120, whereas now it stands at a "far more reasonable" 6.8. A low P/S may signal that a stock is cheap, while a high ratio may suggest it is rich.

SentinelOne is a leading provider of enterprise cybersecurity software. Its AI-powered Singularity platform protects cloud networks, employee identities, endpoints (computers and devices), and more. 

On August 28, SentinelOne reported second-quarter revenue growth of 22% year over year to $242.2 million. Annual recurring revenue rose 24% to $1 billion as of July 31, marking the first time in the company’s history that ARR reached this level. That allowed management to slightly raise its revenue guidance for the full fiscal year, which ends on January 31, to a range of $998 million to $1.002 billion.

For comparison, Palo Alto Networks posted a 16% increase in quarterly revenue on August 18, while CrowdStrike reported a 21% increase on August 27. Di Pizio thinks this could suggest SentinelOne is gradually taking market share. The company values its total addressable market at over $100 billion, and since it only just crossed $1 billion in ARR, it has a very long runway for growth, Di Pizio believes.

Di Pizio also argues that Singularity outperforms most of its peers. SentinelOne believes machines can respond to cyberthreats much faster than humans can: AI stands ready to act at any given moment – it does not need sleep or days off. Singularity delivered perfect accuracy at MITRE's 2024 Evaluations, which measured the effectiveness of cybersecurity platforms. This means it handled more cyber incidents autonomously relative to competing products from CrowdStrike and Palo Alto Networks.

UBS analysts raised their target price on SentinelOne from $19 per share to $21 per share on August 29 while maintaining a “neutral” rating, according to MarketScreener. Last month, BTIG Research downgraded the stock from “buy” to “neutral.”

Overall, however, most analysts remain optimistic on the name. According to MarketWatch, the stock has 24 “buy” recommendations (“buy” and “overweight”), 15 “hold” recommendations, and no “sell” calls. The average target price of $23.47 per share implies more than 24% upside from the August 29 closing price. (U.S. markets were shut yesterday, September 1, for Labor Day.)

The AI translation of this story was reviewed by a human editor.