SentinelOne (S) Stock Drops After Q3 Beat: CFO Exit, Soft Guidance and 2026 Forecast Explained

As of December 5, 2025

SentinelOne, Inc. (NYSE: S) stock is under heavy pressure today despite delivering a stronger‑than‑expected quarter. Shares are trading around $14.50, down roughly 14% on the session, with volume several times above average as investors digest a mix of solid Q3 FY2026 results, a cautious revenue outlook, and the news that Chief Financial Officer Barbara Larson will step down in mid‑January. ^[1]

At the same time, SentinelOne has rolled out new AI‑driven capabilities with Amazon Web Services (AWS), opened a regional headquarters in Riyadh, and added OpenText CEO & CTO Mark J. Barrenechea to its board—developments that could reshape its long‑term growth story. ^[2]

This article walks through what’s happening with SentinelOne stock today, the latest earnings and guidance, key strategic moves, Wall Street forecasts, and what it all may mean for investors looking toward 2026.

1. SentinelOne stock today: near 52‑week lows after double‑digit drop

Price (December 5, 2025, late session): about $14.5 per share, down ~$2.4 on the day (around ‑14%) after the earnings release.
Intraday trading range: roughly mid‑$14s to mid‑$15s, with the stock probing fresh 52‑week lows near $14.5 versus a 52‑week high around $26. ^[3]
Volume: over 30 million shares have changed hands today, compared with an average daily volume of ~5–6 million, highlighting intense reaction to the news. ^[4]

Over the last twelve months, SentinelOne shares are down roughly 30–40%, and Simply Wall St calculates a 1‑year total shareholder return of about –32% and a negative year‑to‑date performance of ~–25%. ^[5]

In short: the stock is back in “reset” territory, trading near its 52‑week low even as the business crosses key milestones like $1 billion in annualized recurring revenue (ARR) and positive free cash flow.

2. Q3 FY2026: strong growth and profitability milestone

SentinelOne’s third quarter of fiscal 2026 (ended October 31, 2025) was objectively strong on most key metrics.

Revenue and ARR

According to the company’s official earnings release: ^[6]

Revenue:
- $258.9 million, up 23% year over year (vs. $210.6 million a year ago).
Annualized recurring revenue (ARR):
- $1.055 billion, also up 23% year over year.
Large customers:
- Customers with ARR of $100,000+ reached 1,572, up 20% from the prior year.

Zacks and AP data show adjusted earnings of $0.07 per share, beating consensus expectations of $0.05 per share, while GAAP results remained in loss‑making territory. ^[7]

Margins and cash flow

The same filing highlights meaningful progress on profitability: ^[8]

Non‑GAAP gross margin: ~79%, roughly flat year over year.
Non‑GAAP operating margin:+7%, a sharp improvement from –5% in the prior‑year quarter.
Non‑GAAP net income margin:+10% versus 0% a year ago.
Operating cash flow margin:8% vs. –3% last year.
Free cash flow (FCF) margin:6% vs. –6% a year ago.
Cash & investments: about $874 million on the balance sheet.

GAAP metrics remain negative (Q3 GAAP net loss of $60.3 million, or –$0.18 per share), but the trend—especially on non‑GAAP margins and free cash flow—shows SentinelOne starting to look like a scaling, self‑funding SaaS platform rather than a cash‑burning startup. ^[9]

Management’s tone

CEO Tomer Weingarten and CFO Barbara Larson emphasized that SentinelOne is now delivering a combination of “top‑tier growth and margin improvement”, with the company surpassing $1B in ARR while turning sustainably positive on non‑GAAP profitability and free cash flow. ^[10]

In other words: operationally, Q3 was a step forward—revenue growth in the low‑20% range, expanding margins, and a clear path toward more durable profitability.

3. So why is SentinelOne stock falling?

Despite the Q3 beat, the stock is selling off sharply. Several factors are driving the negative reaction:

3.1 “Lackluster” Q4 and full‑year revenue guidance

In the same release, SentinelOne guided for: ^[11]

Q4 FY2026 revenue: about $271 million
Full FY2026 revenue: about $1.001 billion

Reuters notes that Wall Street had been expecting around $273.1 million for Q4—so the midpoint of guidance is slightly below consensus and implies a modest deceleration in year‑over‑year growth to the high‑teens range. ^[12]

Zacks data show current consensus for the upcoming quarter at $272.9 million revenue and $0.07 EPS, and $1.0 billion revenue with $0.19 EPS for the full year—very close to management’s numbers but without much upside. ^[13]

The signal to investors: SentinelOne is being cautious heading into 2026, citing a tougher macro environment and intense competition in cloud and endpoint security. That “no upside” guide often translates into short‑term multiple compression for high‑growth software names.

3.2 CFO resignation and interim replacement

The second pressure point is leadership turnover in the finance seat.

In the Q3 release, SentinelOne announced that CFO Barbara Larson will transition out of her role in mid‑January 2026 to pursue an opportunity outside the cybersecurity industry. Barry Padgett, the company’s Chief Growth Officer and a long‑time enterprise software veteran (including at SAP and Stripe), will serve as interim CFO while the board runs a search for a permanent replacement. ^[14]

CFO departures—especially around inflection points like first‑time profitability—tend to make investors nervous, even when the stated reasons are benign. Reuters highlights that the guidance shortfall plus the CFO transition pushed the shares more than 7% lower in after‑hours trading immediately after the announcement, a move that has deepened during today’s regular session. ^[15]

3.3 Execution and competitive concerns

Analyst commentary today points to execution risk and a crowded competitive landscape:

JPMorgan cut its price target from $19 to $17 and kept a Neutral rating, citing the lack of upside in the outlook and the CFO exit overshadowing the quarter. ^[16]
Wedbush trimmed its target from $23 to $20 but maintained an Outperform rating, calling the guide “prudent” given the macro and noting that the Q3 beat will likely be overshadowed by the softer outlook. ^[17]
TD Cowen lowered its target from $24 to $22, still with a Buy rating, citing execution concerns but arguing the stock looks undervalued near 52‑week lows. ^[18]

Together, these messages reinforce the narrative that SentinelOne’s technology is strong, but it has little room for missteps as enterprises scrutinize security budgets and rivals like CrowdStrike, Palo Alto Networks, and Microsoft compete aggressively. ^[19]

4. Strategic catalysts: AWS, AI portfolio, Riyadh HQ and board upgrades

Even as investors focus on guidance and the CFO change, SentinelOne has packed several strategic moves into the last few weeks.

4.1 Deepening partnership with AWS and GenAI integrations

In early November and again this week at AWS re:Invent 2025, SentinelOne announced a flurry of new integrations and designations with Amazon Web Services: ^[20]

Key elements include:

Singularity Hyperautomation for AWS Security Incident Response, enabling no‑code playbooks that can automatically isolate resources, trigger cases, and orchestrate containment for AWS security events.
Purple AI support for AWS CloudTrail, allowing security teams to run natural‑language investigations across CloudTrail logs without complex query syntax.
Prompt Security tools on AWS Marketplace, helping customers govern generative AI usage, prevent data leakage, and stop “shadow AI” and prompt‑injection risks.
AWS Generative AI Competency, an official AWS badge that validates SentinelOne’s expertise in securing GenAI workloads on AWS.

These integrations extend SentinelOne’s AI‑native security platform deeper into customers’ cloud and AI pipelines, strengthening its positioning as organizations shift workloads and AI agents into AWS.

4.2 AI Security portfolio and Observo AI data pipeline

At the OneCon 2025 conference in November, SentinelOne unveiled a broader AI Security portfolio and integrations following its Observo AI acquisition: ^[21]

Highlights include:

A suite of Prompt Security products for employees, AI code assistants, custom AI applications, and agentic AI—aimed at stopping data leakage, insecure code, and rogue AI agents.
Integration of Observo AI with Singularity AI SIEM, creating an AI‑native streaming data platform that ingests and normalizes petabytes of security data, then routes only the most relevant signals into the SIEM.
Expanded capabilities for Purple AI, SentinelOne’s “agentic” AI security analyst, including end‑to‑end automated investigations and one‑click creation of custom detection rules.

This end‑to‑end AI strategy—often framed by management as “AI for Security and Security for AI”—is central to SentinelOne’s long‑term differentiation. ^[22]

4.3 Industry recognition: Gartner leader and SIEM Innovation of the Year

Independent coverage also underscores SentinelOne’s technology leadership:

The Hacker News reports that Gartner named SentinelOne a Leader in the 2025 Magic Quadrant for Endpoint Protection Platforms for the fifth consecutive year, and notes strong performance in MITRE ATT&CK evaluations as well as FedRAMP High authorization for its Singularity platform. ^[23]
SentinelOne’s Singularity AI SIEM was named “SIEM Innovation of the Year” in the 2025 CyberSecurity Breakthrough Awards, recognizing its cloud‑native architecture, long‑term hot storage, and AI‑powered automation via Purple AI and Hyperautomation. ^[24]

These accolades support the view that SentinelOne remains near the front of the pack technologically, even as commercial execution and macro headwinds weigh on the share price.

4.4 Expansion in Saudi Arabia and Vision 2030

This week, SentinelOne also announced the opening of a new regional headquarters in Riyadh, Saudi Arabia, which will serve as the main hub for its operations in the Kingdom and support Saudi Vision 2030’s digital transformation and cybersecurity goals. ^[25]

The new HQ and associated data‑center presence are intended to:

Strengthen local customer support and services
Enable training, workshops, and threat‑hunting labs for local talent
Align SentinelOne with national priorities around sovereign cybersecurity and AI‑driven resilience

Regional coverage notes that the company sees Saudi Arabia as one of the fastest‑advancing digital economies, and that its expanded presence positions SentinelOne for large‑scale government and enterprise deals in the Middle East. ^[26]

4.5 Board reinforcement: Mark J. Barrenechea joins

On December 3, SentinelOne announced the appointment of Mark J. Barrenechea, CEO and CTO of OpenText, to its board of directors. ^[27]

Barrenechea brings decades of experience in enterprise software, cloud, and information management, and his appointment is framed as strengthening governance and strategy at a time when SentinelOne is pushing deeper into data platforms, AI security, and large‑scale cloud partnerships.

5. Wall Street view: still a “Buy,” but with trimmed expectations

Despite today’s sell‑off and a series of target cuts, most analysts remain constructive on SentinelOne’s medium‑term outlook.

5.1 Consensus rating and price targets

Across multiple aggregators, the 12‑month consensus rating remains in the “Buy / Moderate Buy” zone:

StockAnalysis.com: 28 covering analysts, consensus “Buy”, average target around $22.1 (low $16, high $28), implying roughly 50% upside from prices near $14.5. ^[28]
MarketBeat: consensus target about $22.4 from 30+ analysts, implying ~54% upside from ~$14.55. ^[29]
TipRanks: average target around $22.8, with recent data showing 8 Buys and 5 Holds, and a “Moderate Buy” consensus. ^[30]
Zacks: average target clustered in the low‑to‑mid $20s, with a forecast upside of roughly 30–40% from recent levels. ^[31]

Recent single‑firm moves include:

Needham: Buy, target $21 (down from $23). ^[32]
Wedbush: Outperform, target $20 (from $23). ^[33]
TD Cowen: Buy, target $22 (from $24). ^[34]
JPMorgan: Neutral, target $17 (from $19). ^[35]

MarketBeat’s broader tally finds the stock carrying a “Moderate Buy” rating overall, with the consensus target just under $24 before the latest round of cuts. ^[36]

5.2 What analysts are focusing on

Common themes in today’s notes:

Q3 execution was strong: revenue, ARR, and margins all came in ahead of expectations, and free cash flow is tracking better than many peers. ^[37]
Guidance is conservative: the Q4 and full‑year outlook largely matches or slightly lags consensus, which limits near‑term estimate revisions to the upside. ^[38]
CFO transition raises questions: not necessarily a red flag on accounting, but a governance and execution overhang until a new permanent CFO is announced. ^[39]
Valuation vs. growth trade‑off: with revenue growth in the low‑20s, net retention stabilizing, and free cash flow improving, analysts generally see room for multiple expansion if SentinelOne can re‑accelerate growth or sustain outsized AI‑driven wins—but they also warn that competition and macro spending pressure could cap upside.

Simply Wall St’s latest piece sums it up bluntly: their narrative‑based fair value estimate near $23.50 suggests upside from current prices, but they note SentinelOne trades at about 6.3x price‑to‑sales, slightly richer than U.S. software peers (~5x) and close to its direct peer group (~6.2x), leaving “little margin for execution missteps.” ^[40]

6. Valuation snapshot: high‑growth security at ~6x sales

Pulling the numbers together:

Market cap: roughly $5.7 billion, according to recent stock‑data summaries. ^[41]
FY2026 revenue guide: about $1.0 billion. ^[42]

That implies a forward price‑to‑sales multiple around 5.7–6.0x, broadly in line with the Simply Wall St estimate and slightly above the average for U.S. software peers. ^[43]

On an earnings basis, Zacks’ full‑year non‑GAAP EPS estimate of $0.19 would put the stock at a forward P/E in the mid‑70s at current prices—a reminder that investors are still being asked to pay a growth and quality premium, not a value multiple. ^[44]

The bull case is that SentinelOne can grow into this valuation by:

Maintaining 20%+ revenue growth,
Expanding non‑GAAP operating margins toward low‑teens over time, and
Leveraging its AI and data‑platform strategy to capture higher‑value deals.

The bear case is that slowing growth, competitive pressure, or missteps during the CFO transition could compress the multiple further.

7. Key risks and opportunities for SentinelOne stock

7.1 Upside opportunities

AI‑native platform advantage
The combination of Purple AI, Singularity AI SIEM, Hyperautomation, and the Observo AI data pipeline gives SentinelOne an AI‑driven stack that many reviewers and analysts describe as best‑in‑class for autonomous detection, investigation, and response. ^[45]
Expanding cloud and AI partnerships
Deeper integrations with AWS—including AWS Marketplace listings, CloudTrail analysis via Purple AI, and GenAI competency—open the door for larger cloud‑native deals and tighter alignment with enterprise AI roadmaps. ^[46]
International growth and sovereign‑cloud tailwinds
The new headquarters and data‑center presence in Riyadh position SentinelOne to capitalize on Saudi Vision 2030 projects and broader MENA digital‑transformation investments, where cybersecurity and data‑sovereignty requirements often favor specialist providers. ^[47]
Path to sustained profitability
With non‑GAAP operating margins now positive and free cash flow margins in the mid‑single digits, SentinelOne has started to self‑fund its growth, reducing dependence on capital markets and improving its resilience if the macro environment deteriorates. ^[48]

7.2 Main risks

Execution risk during leadership transition
The CFO change introduces short‑term uncertainty around capital allocation, investor communication, and internal controls—especially as the company juggles large partnerships, acquisitions, and rapid product expansion. ^[49]
Competitive pressure and pricing
SentinelOne faces heavyweight rivals including CrowdStrike, Microsoft, and Palo Alto Networks, all investing heavily in AI‑driven security. Aggressive bundling and discounting by platform giants could pressure SentinelOne’s growth, net retention, or margins. ^[50]
Valuation sensitivity
Trading at ~six times forward sales and a high forward earnings multiple, SentinelOne leaves limited margin for error. Disappointments in growth or margin trajectory could lead to outsized share‑price swings, as today’s reaction demonstrates. ^[51]
Macro and IT‑spend volatility
Cybersecurity is mission‑critical, but even security budgets can be reprioritized or delayed during economic uncertainty, particularly in mid‑market and international segments.

8. What to watch next

For investors tracking SentinelOne into 2026, several catalysts and checkpoints stand out:

Appointment of a permanent CFO
The choice and timing of a new CFO will be closely scrutinized as a signal of SentinelOne’s maturity, discipline, and strategic direction.
Q4 FY2026 results and FY2027 guidance
The next earnings report will show whether the company can outperform its cautious guide and set a tone of re‑acceleration or continued moderation for FY2027.
Progress in cloud & AI security deals
Watch for customer case studies, large deal announcements, or ARR disclosures tied to AWS, GenAI, and AI‑security projects, especially as more organizations productionize agentic AI.
Traction in Saudi Arabia and broader EMEA
Any commentary on Riyadh HQ, local data centers, or government and telco wins could validate SentinelOne’s strategy in the Middle East.
Margin trajectory
Sustained improvement in non‑GAAP operating margin and free cash flow would strengthen the long‑term bull case, even if top‑line growth hovers in the low‑20s.

9. SentinelOne (S) stock – quick FAQ

Is SentinelOne stock a buy right now?

Most Wall Street firms still rate SentinelOne as a Buy or Moderate Buy, with consensus 12‑month price targets clustering around $22–23, implying ~50% upside from today’s levels. ^[52]

However, those same analysts highlight execution, competitive, and valuation risks, especially in light of the CFO transition and cautious revenue outlook. Whether it is a buy for you depends on your risk tolerance, time horizon, and portfolio mix.

This article is informational and does not constitute investment advice. Consider speaking with a qualified financial advisor before making any investment decisions.

Why did SentinelOne stock drop after “good” earnings?

Because expectations matter as much as the numbers:

Q3 results beat on revenue and earnings.
Q4 and full‑year guidance came in at or slightly below consensus.
The CFO resignation created an additional overhang.

The combination led investors to reset valuation expectations, causing the double‑digit drop.

How fast is SentinelOne growing?

SentinelOne is currently growing revenue and ARR at about 23% year over year, with a base of just over $1.0 billion in ARR and guided FY2026 revenue of roughly $1.0 billion. ^[53]

Is SentinelOne profitable?

On a GAAP basis, no—the company still reports net losses. But on a non‑GAAP basis, SentinelOne has:

Positive operating margin (~7%)
Positive net income margin (~10%)
Positive free cash flow margin (~6%) in Q3 FY2026. ^[54]

Management frames this as the beginning of a long‑term shift toward sustainable, profitable growth.

If you’re following SentinelOne closely, it’s a classic high‑growth cybersecurity story at an inflection point: profitable on an adjusted basis, deeply invested in AI security and cloud partnerships, but now under pressure to prove it can deliver consistent growth and execution in a tougher market.

References