SentinelOne (NYSE: S) Stock After Q3 Earnings: Double‑Digit Growth, CFO Exit and AWS AI Push Shape 2026 Outlook

SentinelOne, Inc. (NYSE: S) has just delivered a busy week: strong third‑quarter results, softer‑than‑expected guidance, a surprise CFO departure and a fresh wave of AI‑focused integrations with Amazon Web Services. As of December 5, 2025, the cybersecurity stock sits in the crosshairs of two powerful forces: improving profitability and mounting investor caution.

On December 4, shares closed at $16.97, up a fraction on the day, but the Q3 report and outlook knocked the stock more than 8% lower in after‑hours and pre‑market trading, to roughly the mid‑$15 range. ^[1] According to data tracked by Reuters and Zacks, SentinelOne shares are down about 23–24% year to date, even as the broader market has advanced. ^[2]

This is the backdrop against which investors are digesting the latest numbers, guidance and analyst commentary.

Q3 FY2026: Revenue Growth Clears $1B ARR and Profitability Turns the Corner

SentinelOne’s third quarter of fiscal 2026 (three months ended October 31, 2025) marked a clear step forward in scale and profitability.

Top line and recurring revenue

According to the company’s official earnings release, key metrics were: ^[3]

Revenue: $258.9 million, up 23% year over year (from $210.6 million).
Annualized recurring revenue (ARR): $1.06 billion, also up 23% year over year.
Large customers: Clients generating at least $100,000 in ARR increased 20% to 1,572.

This moves SentinelOne firmly into the “$1B+ ARR” club – a psychological and strategic milestone that puts it closer to more mature peers like CrowdStrike and Palo Alto Networks in terms of scale, even though revenue is still significantly smaller.

Margins and cash flow: from burning to earning

The most notable shift in Q3 happened below the revenue line:

GAAP gross margin: 74% (down slightly from 75%).
Non‑GAAP gross margin: 79% (down from 80%).
GAAP operating margin: ‑28%, a big improvement from ‑42% a year earlier.
Non‑GAAP operating margin:+7%, versus ‑5% in the prior year.
Non‑GAAP net income margin:10%, up from 0%.
Operating cash flow margin: 8% (vs ‑3% a year earlier).
Free cash flow margin: 6% (vs ‑6%). ^[4]

The company ended the quarter with $873.6 million in cash, cash equivalents and investments, giving it ample firepower to keep funding R&D, acquisitions and go‑to‑market expansion. ^[5]

Put simply: SentinelOne is no longer just a high‑growth, cash‑burning endpoint startup. It is now a high‑growth, cash‑generating AI‑security platform, at least on a non‑GAAP basis.

Did SentinelOne beat expectations?

Different data providers show slightly different “consensus” numbers, but they all point in the same direction:

Zacks reports that Q3 revenue of $258.9 million beat its consensus by about 1.1%, and non‑GAAP EPS of $0.07 beat estimates of $0.05 – a 40% EPS beat. ^[6]
Refinitiv/LSEG data cited by Reuters also notes that Q3 revenue “slightly surpassed” forecasts. ^[7]
ChartMill similarly characterizes the quarter as an earnings beat, highlighting the upside on EPS. ^[8]

The upshot: Q3 was solid on both growth and profitability, with EPS clearly ahead of expectations and revenue at least modestly above, depending on the data source.

Guidance and CFO Departure: Why the Stock Sold Off

If the quarter looked good, why did the stock sink? Two key reasons: cautious guidance and leadership changes.

Q4 and FY2026 outlook: solid margins, softer revenue

In its outlook, SentinelOne guided for: ^[9]

Q4 FY2026 revenue:$271 million
Full‑year FY2026 revenue:$1.001 billion
Non‑GAAP gross margin: ~77.5% for Q4; 78.5% for the full year
Non‑GAAP operating margin:5% in Q4; 3% for the full year

The margin guidance reinforces the message that SentinelOne is serious about sustainable profitability. But revenue is where investors balked:

Zacks lists consensus Q4 revenue at around $272.9 million, with full‑year revenue expectations around $1.0 billion. ^[10]
Refinitiv/LSEG data cited by Reuters pegs the Street’s Q4 revenue estimate at $273.1 million. ^[11]
ChartMill references an even higher Q4 consensus near $278.6 million and full‑year expectations around $1.022 billion. ^[12]

Against that backdrop, $271 million Q4 guidance and $1.001 billion for the year represent a modest revenue undershoot, especially for a stock priced as a high‑growth cybersecurity name. That “growth deceleration vs expectations” narrative often matters more to Wall Street than a clean EPS beat.

CFO Barbara Larson steps down

Layered on top of the softer outlook, SentinelOne announced that Chief Financial Officer Barbara Larson will leave the company in mid‑January 2026 to pursue an opportunity outside cybersecurity. Chief Growth Officer Barry Padgett, a veteran of SAP and Stripe, will serve as interim CFO while the company searches for a permanent replacement. ^[13]

Larson presided over the company’s transition from heavy losses to positive non‑GAAP operating margins and improved free cash flow. Her departure so soon after SentinelOne hit key profitability milestones introduced another layer of uncertainty just as investors were trying to understand a slower‑than‑hoped revenue trajectory.

Analysts quickly flagged the combination of “no upside” guidance and CFO turnover as a sentiment negative. Reuters notes that at least four brokerages cut their price targets after the report, with J.P. Morgan trimming its target to $17 and explicitly citing the lack of outlook upside and the CFO change as investor concerns. ^[14]

Analyst Ratings: Still a “Buy,” But Targets Move Down

Despite the post‑earnings wobble, most Wall Street analysts remain fundamentally positive on SentinelOne.

Consensus ratings and targets

Across multiple data providers:

TradingView, aggregating 39 analysts, shows an overall “buy” rating and a 12‑month average price target of about $22.47, with estimates ranging roughly from $16 to $30. ^[15]
MarketBeat reports a “Moderate Buy” consensus and an average target near $23.8, based on a mix of buy, hold and a small number of sell ratings. ^[16]
The same MarketBeat report notes that two analysts rate the stock “Strong Buy,” sixteen “Buy,” nine “Hold” and one “Sell.” ^[17]
Reuters data points to an average “buy” rating and a median price target of $23. ^[18]

Taken together, this means consensus expectations cluster in the low‑to‑mid $20s, notably above the mid‑teens where the stock is trading after the earnings reaction – but also lower than many targets earlier in 2025.

Recent target cuts: Goldman Sachs, BofA and others

Several high‑profile firms have turned more cautious on upside, even while staying constructive overall:

Goldman Sachs lowered its SentinelOne price target to $19, highlighting intensifying competition in endpoint and cloud security. ^[19]
Bank of America reduced its target to $18 (from $19), explicitly linking the cut to the CFO departure and conservative outlook while maintaining a neutral stance. ^[20]
J.P. Morgan’s cut to $17 underscores concerns around the lack of “beat and raise” momentum. ^[21]

Meanwhile, Zacks assigns SentinelOne a Rank #3 (Hold), implying expectations for performance roughly in line with the broader market in the near term, even after the Q3 beat. ^[22]

Volatility and valuation

A recent FinViz/StockStory piece tagged SentinelOne as one of two “volatile stocks to watch”, highlighting: ^[23]

A rolling one‑year beta of about 1.24 (meaning S tends to move more than the market).
ARR growth in the mid‑20% range.
A forward price‑to‑sales multiple near 4.9x at around $16 per share.

That valuation is cheaper than hyper‑premium peers but still assumes continued double‑digit growth and sustained margin expansion.

Institutional Flows: Big Money Still Interested

Institutional investors remain heavily involved in SentinelOne:

MarketBeat reports that JPMorgan Chase & Co. boosted its position by 37.9% in Q2, adding more than 850,000 shares to bring its holdings to about 3.1 million shares, roughly 0.93% of the company at the time. ^[24]
Vanguard, Sylebra Capital, Voya, Geode and Champlain Investment Partners all increased their positions earlier in 2025, contributing to institutional ownership of about 90.9% of the float. ^[25]

At the same time, insiders have been net sellers over the past few months, with roughly 481,000 shares sold (about $8.6 million in value), including sales from CFO Barbara Larson and insider Ric Smith. ^[26]

This combination – heavy institutional ownership, insider selling, and a volatile share price – tends to amplify moves in both directions.

Strategic Growth Story: AI Security, Acquisitions and Deepening AWS Ties

Beyond the quarter‑to‑quarter numbers, SentinelOne is clearly positioning itself as an AI‑first security and data platform, not just an endpoint vendor.

Buying Prompt Security to secure generative AI

In August 2025, SentinelOne announced a deal to acquire Prompt Security, a startup specializing in runtime security for generative AI and intelligent agents. ^[27]

The acquisition aims to:

Provide real‑time visibility into how AI tools are used across the enterprise.
Detect and block prompt injection attacks, sensitive data leakage and AI misuse.
Offer policy‑based controls over tools like ChatGPT, Claude, Gemini, custom LLMs and agentic AI frameworks. ^[28]

This move extends SentinelOne’s Singularity platform from “AI for security” into “security for AI,” giving CISOs a framework to embrace AI at scale without losing control over data and compliance.

Observo AI: building an AI‑ready data pipeline for SIEM

Earlier in September, SentinelOne agreed to acquire Observo AI, a company that builds data streaming pipelines for security telemetry and observability, designed to reduce SIEM and log‑management costs while enhancing detection and response. ^[29]

Observo AI:

Ingests, enriches and routes security data before it hits expensive SIEM or data lake infrastructure.
Claims to reduce data noise by up to 80% and cut security/observability costs by 50% or more. ^[30]

Integrating Observo into SentinelOne’s AI‑SIEM and data lake strategy strengthens the company’s ability to own the security data plane, not just the endpoint agent.

AWS re:Invent 2025: Data‑first AI security in the cloud

This week, SentinelOne used AWS re:Invent 2025 to showcase how those acquisitions and its own AI stack fit into a broader cloud‑first story. In a joint BusinessWire and company press release, SentinelOne announced: ^[31]

New integrations between its Singularity platform and AWS Security Hub, allowing prioritized AWS findings to flow directly into SentinelOne’s AI‑SIEM, where they can be correlated with endpoint, identity and AI telemetry.
Deeper integration with Amazon CloudWatch, creating bidirectional data flows using the OCSF open security data standard to unify operations, security and compliance telemetry.
Support for AWS IAM temporary delegation to simplify setup and accelerate time‑to‑value for customers deploying these integrations.
Purple AI MCP Server listed on AWS Marketplace, acting as a universal bridge between SentinelOne’s platform and a wide range of AI frameworks and large language models.
Observo AI’s data pipeline added to the AWS GenAI Marketplace, giving AWS customers a native way to reduce data noise and costs while accelerating incident resolution.

Coverage from security and channel publications has framed this as SentinelOne building a “data‑first model for AI security on AWS,” with AI‑native protection woven across multiple AWS services. ^[32]

Taken together, Prompt Security, Observo AI and the AWS integrations show a clear strategic arc: SentinelOne wants to own the AI‑security stack from endpoints and identities to cloud data and AI usage, not just sell antivirus on steroids.

Board refresh: bringing in an AI‑savvy tech veteran

On December 3, the company also announced the appointment of Mark J. Barrenechea – former CEO/CTO of OpenText and a long‑time enterprise software executive – to its board of directors. ^[33]

Barrenechea has decades of experience scaling software and data platforms and sits on other large‑cap boards. His arrival adds further depth on governance, audit and AI‑driven platform strategy at exactly the moment SentinelOne is trying to convince investors that it can become a durable platform, not a niche point solution.

Key Themes and Risks For SentinelOne Stock

From an investor’s perspective, several themes now define the SentinelOne (S) story going into 2026:

Growth vs. expectations: Mid‑20% ARR growth and 23% revenue growth are strong in absolute terms, but the market had been hoping for more aggressive top‑line upside. Guidance implies a more measured growth path. ^[34]
Profitability inflection: The shift to positive non‑GAAP operating margins, double‑digit non‑GAAP net margins and positive free cash flow represents a genuine inflection point – and gives management more levers during periods of macro or competitive pressure. ^[35]
Leadership transition: The CFO departure shortly after reaching profitability will remain a watch‑item until a permanent replacement is named and the company proves it can keep delivering in line with – or above – its own guidance. ^[36]
Competitive intensity: Analyst commentary from Goldman Sachs and others continues to flag fierce competition in endpoint, XDR and cloud security – particularly from larger, deeply entrenched rivals. ^[37]
AI execution: The strategic bet on AI‑native security, Prompt Security, Observo AI and deep AWS integrations could differentiate SentinelOne – or simply raise the bar it must clear to justify its valuation. Execution, customer adoption of these new offerings and real‑world margin impact will be crucial. ^[38]

Bottom Line: A Higher‑Quality Business With a More Complicated Narrative

As of December 5, 2025, SentinelOne stock sits at an interesting intersection:

The business is stronger: higher scale, positive non‑GAAP profitability, growing free cash flow and a clearer platform story around AI and data.
The narrative is trickier: revenue guidance that sits below parts of the Street, CFO turnover, ongoing competition and a share price that remains highly volatile and meaningfully below early‑year levels.

Analysts, on average, still see upside from current prices, but the cluster of recent price‑target cuts and “Hold”‑style ratings suggests expectations have been reset lower, at least for the near term. ^[39]

For investors tracking SentinelOne, the next few quarters will likely hinge on three questions:

Can the company re‑accelerate revenue growth without sacrificing its hard‑won margin gains?
Will the new CFO (once named) and leadership team maintain credibility by consistently meeting or beating their own guidance?
Do the AI, AWS and data‑pipeline initiatives translate into visible upsell, cross‑sell and cost efficiencies that show up in numbers, not just press releases?

Until those questions are answered, expect SentinelOne (S) to remain exactly what FinViz called it: a volatile stock that can move sharply in either direction as the market updates its view of how the story plays out. ^[40]