Should you bet on SentinelOne stock rebound after its post-earnings decline?

By:
on Dec 8, 2021
  • SentinelOne shares plummeted more than 7% during after-hours trading on Tuesday.
  • The company announced its most recent quarterly results after markets closed.
  • SentinelOne outperformed analyst estimates on revenue and earnings.

Shares of Mountain View CA-based cybersecurity startup SentinelOne Inc. (NYSE:S) plunged by more than 7% during Tuesday’s extended trading session. The company announced its most recent quarterly results after markets closed, beating the consensus for analyst expectations on revenue and earnings.

SentinelOne posted fiscal third-quarter non-GAAP earnings per share of -$0.15, beating the average analyst estimate of -$0.18. On the other hand, its GAAP EPS of -$0.26 was in line with Street forecasts, while revenue for the quarter rocketed by 128.1% from the same quarter last year to $56.02 million, exceeding expectations by $6.44 million.

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Although SentinelOne shares have declined by more than 33% since the 12th of November, the stock is still up more than 20% this year.

Is it too risky to buy SentinelOne stock?

From an investment perspective, SentinelOne shares trade at a steep price-sales ratio of 106.41. Therefore, the stock may not be an ideal option for value investors.

In addition, analysts expect SentinelOne earnings to plummet by 53.60% this year, before recovering slightly by 12.30% next year. As a result, growth investors could also opt for alternatives in the market.

Source – TradingView

Technically, SentinelOne shares seem to be trading within a descending channel formation in the intraday chart. However, the stock has recently bounced back, rallying to retest the trendline resistance.

As a result, SentinelOne is no longer in danger of slipping to oversold conditions. Therefore, investors could target technical pullback profits at about $45.45, or lower at $40.34, while $55.36 and $60.01 are crucial resistance zones.

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