DA Davidson Labels SentinelOne (S) Undervalued but Maintains Cautious Stance Pending Growth Stabilization

SentinelOne Inc. (NYSE:S) is one of the AI stocks under $20 to buy now. On December 5, DA Davidson lowered the firm’s price target on SentinelOne to $16 from $19 and kept a Neutral rating on the shares. The firm highlighted that the company delivered a strong FQ3 2026 performance, with its $1.055 billion in annual recurring revenue surpassing the consensus estimate of $1.051 billion. DA Davidson noted that the stock is currently undervalued, but an upward shift in valuation is unlikely until there is clear evidence that growth has stabilized.

In the said third quarter, SentinelOne Inc. (NYSE:S) delivered $259 million in revenue, which represented a 23% year-over-year increase. Key growth indicators remained robust, with ARR climbing 23% to $1.055 billion and RPO surging 35% to reach $1.3 billion. International expansion was a major highlight, with revenue from outside the US growing 34% to account for 40% of the total business.

SentinelOne continues to use its Purple AI and Flex licensing models to drive platform consolidation. Purple AI has seen a rapid 40% attach rate among new licenses, while the Flex model is enabling larger, multi-solution deals by allowing customers to consume the Singularity platform more dynamically. During the quarter, the company closed the $225 million acquisition of Observo AI, adding a policy-driven data pipeline to its stack, and completed the acquisition of Prompt Security for $180 million.

For the full FY2026, SentinelOne Inc. (NYSE:S) expects total revenue of ~$1.001 billion, which would be a 22% year-over-year growth.

SentinelOne Inc. (NYSE:S) operates as a cybersecurity provider in the US and internationally. The company’s Singularity Platform delivers an AI-powered autonomous threat prevention, detection, and response capabilities across an organization’s endpoints, cloud workloads, and identity credentials.

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Disclosure: None. This article is originally published at Insider Monkey.