Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.
In this report, we are going to highlight some interesting insider buying at SentinelOne Inc (S:US). SentinelOne is an American cybersecurity company that went public in 2021. Its cybersecurity solution encompasses AI-powered prevention, detection, response, and hunting across endpoints, containers, cloud workloads, and IoT devices in a single autonomous XDR platform. The company is listed on the New York Stock Exchange and currently has a market capitalization of $9.05 billion.
SentinelOne Inc: Insider Buying
Our insider transaction data shows that on April 12, board member Mark Peek purchased 30,000 shares at an average price of $34.40 per share. This trading activity cost the insider $1,032,000 and increased his holding to 70,000 shares.
This insider transaction is worth highlighting for a couple of reasons. Firstly, it is large in size. The fact that the insider has spent over $1 million on stock suggests he’s confident the share price is set to move higher.
Secondly, it has increased the size of the insider’s holding by 75%. This also suggests he’s very confident the stock is set to climb.
It’s worth noting that Mr. Peek has substantial experience in the technology sector. Since February 2018, he has served as Executive Vice President, Managing Director and Head of Workday Ventures, the strategic investment arm of Workday, Inc., a leading provider of enterprise cloud applications for finance and human resources. Prior to joining Workday, he served as President, Business Operations and CFO of VMware, Inc., a provider of business infrastructure virtualization solutions. So, he is likely to have a good understanding of the potential here.
Strong Top-Line Growth
SentinelOne’s recent Q4 fiscal 2022 results showed that the company is growing at a rapid rate right now.
For the three-month period ended 31 January, total revenue amounted to $65.6 million, a 120% increase on Q4 2021. Meanwhile, at the end of the period, the group had 6,700 customers, up 70% year on year.
Encouragingly, gross profit margin for Q4 was up significantly year on year. It came in at 66% versus 54% a year earlier. Non-GAAP operating margin was (66)% versus (104)% in Q4 2021.
“We once again delivered significant top line growth and margin improvement. Our fourth quarter ARR increased 123% year-over-year to $292 million, driven by strength from large enterprises, both new and existing,” said CFO Dave Bernhardt. “We’ve paired phenomenal growth with double digit gross and operating margin expansion compared to last year, highlighting the efficiency and scalability of our model,” he added.
Looking ahead, the group expects to generate revenue of $74 to $75 million for Q1 FY2023 and revenue of $366 to $370 million for FY2023. That would represent full-year top-line growth of around 80%.
In light of the growth the company is generating right now, we see the insider buying as a bullish indicator.