Could SentinelOne Stock Help You Become a Millionaire?
Cybersecurity stocks are in the news after a flawed update from CrowdStrike virtually bricked 8.5 million computers worldwide last week. While it’s unclear how much the breach will impact CrowdStrike over the long term, it could be a long-awaited opportunity for its smaller rival, SentinelOne (NYSE: S), to shine.
The rising cybersecurity star is one of Wall Street’s fastest-growing companies and rapidly heading toward profitability. Meanwhile, the stock’s attractive valuation and small size make it a multibagger candidate that could lift portfolios and create life-changing investment returns over the coming years.
Here are three primary reasons why SentinelOne is the best cybersecurity stock to buy today, and why it packs millionaire-making potential for investors looking years down the road.
1. Standout technology with growth opportunities
To be clear, I’m not arguing that CrowdStrike’s blunders are the sole reason why SentinelOne could succeed. SentinelOne’s cybersecurity platform stands out on its own. The company’s Singularity platform provides autonomous security protection using artificial intelligence (AI) to hunt down threats before they cause issues.
SentinelOne’s security technology is cutting-edge; it boasts top performance in third-party benchmark tests like the “MITRE ATT&CK” Evaluation and glowing reviews by technology professionals on Gartner‘s website.
SentinelOne tells a good story but remains an underdog in a highly competitive cybersecurity field. Larger peers like CrowdStrike offer their own great technology, and others like Microsoft have name power and sticky, widespread relationships with enterprises everywhere.
I think CrowdStrike will eventually work through its IT outage, but it’s a blemish on its reputation and could give SentinelOne an extra push to help it win business. That would be welcome for SentinelOne, which is already growing at an impressive rate:
Sustaining strong growth as revenue exceeds $1 billion will determine the stock’s investment potential. The company has launched new products to expand its footprint, including products for data lake, cloud, identity security, and Purple. Purple is a generative AI feature that makes it easier for IT workers to use SentinelOne’s platform.
These new products were an impressive 40% of bookings in Q1 of SentinelOne’s fiscal year 2025. The successful launch of new products is another key to maintaining high revenue growth.
Can SentinelOne grow revenue by at least 20% annually for the next decade and beyond? Time will tell, but the ingredients are there.
2. A small company with lots of growth potential
Let’s examine the market evidence supporting SentinelOne’s long-term growth opportunities. Archrival CrowdStrike believes the market opportunity for AI-native cybersecurity is worth $100 billion and will grow to $225 billion by 2028. Remember that SentinelOne isn’t even doing $1 billion in annual sales yet. This underlines just how ample the opportunity ahead really could be and how early it is.
CrowdStrike offers more products today, so not all of that market is currently open to SentinelOne. Still, SentinelOne’s successful product launches should give investors confidence that management will continue working to unlock new growth opportunities through product innovation over the coming years.
What also instills confidence is that SentinelOne can win even the largest clients despite its smaller size. It currently serves three Fortune 10 companies and hundreds in the global 2000.
Overall, SentinelOne has shown an ability to compete with larger competition, likely due to its high-end technology. This bodes well for long-term growth as long as SentinelOne remains a technology leader.
3. The price is right
The problem with most winning technology stocks today is that they are already big and/or expensive. A stock needs room to run to become a multibagger that can create millionaire investors. SentinelOne checks two necessary boxes in that it’s both small and inexpensive today.
SentinelOne trades at a roughly 50% discount to the other hot security names on Wall Street. The company’s lack of profits has much to do with this, but it’s changing that narrative after generating positive free cash flow last quarter.
So is SentinelOne a millionaire-maker stock?
An inexpensive, small, rapidly growing business gives investors three tailwinds to drive long-term returns. Of course, SentinelOne must continue performing well as a business to win the market’s confidence.
Ultimately, SentinelOne is a $7 billion cybersecurity stock with a top-notch product, strong growth momentum, and rapidly improving financials. CrowdStrike was nearly a $100 billion stock before its recent blunders, which gives an idea of SentinelOne’s eventual investment potential if it can continue following in its rival’s footsteps over the next decade and beyond. Much needs to happen between now and then, but SentinelOne can absolutely help you become a millionaire if you’re patient enough and things go right.
Should you invest $1,000 in SentinelOne right now?
Before you buy stock in SentinelOne, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SentinelOne wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $692,784!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of July 22, 2024
Justin Pope has positions in SentinelOne. The Motley Fool has positions in and recommends Cloudflare, CrowdStrike, Microsoft, and Palo Alto Networks. The Motley Fool recommends Gartner and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Could SentinelOne Stock Help You Become a Millionaire? was originally published by The Motley Fool