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Is This the Best Time to Add SentinelOne (S)?

Baron Funds, an investment management company, released its “Baron Discovery Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. Baron Discovery Fund (the Fund) reached its 10-year anniversary on September 30, 2023. Since inception, on a cumulative basis, the fund was up 195.3% (Institutional Shares) compared to the Russell 2000 Growth Index’s 91.6% return. During the quarter, the fund returned -5.36% (Institutional Shares) compared to -7.32% return for the benchmark. The bond market became the latest headwind to stock market performance in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Baron Discovery Fund highlighted stocks like SentinelOne, Inc. (NYSE:S) in the third quarter 2023 investor letter. Headquartered in Mountain View, California, SentinelOne, Inc. (NYSE:S) is a cybersecurity provider. On November 8, 2023, SentinelOne, Inc. (NYSE:S) stock closed at $15.64 per share. One-month return of SentinelOne, Inc. (NYSE:S) was -7.24%, and its shares lost 12.13% of their value over the last 52 weeks. SentinelOne, Inc. (NYSE:S) has a market capitalization of $4.491 billion.

Baron Discovery Fund made the following comment about SentinelOne, Inc. (NYSE:S) in its Q3 2023 investor letter:

"We initiated a position in SentinelOne, Inc. (NYSE:S) this quarter after the stock fell sharply on its March 2023 quarterly results. The company lowered its full-year guidance for revenue growth by about 10%, and it will still grow annualized recurring revenue by a mid-30s rate. We believe that the market over reacted to the update, and we already saw a positive update in its June 2023 results (increasing full-year revenue growth to 43%). This is a classic fallen angel investment for the Fund.

SentinelOne is a cybersecurity vendor primarily focused on endpoint protection (preventing malicious attacks on corporate laptops, mobile devices, and servers). The company collects petabytes of data from over 15 million endpoints across its customer base and uses artificial intelligence (AI) to learn behavior patterns, detect suspicious activity, proactively hunt threats, and roll-back devices to their pre-breach states to mitigate damage when attacks occur. SentinelOne is widely recognized as a technology leader in the $27 billion endpoint and cloud security industry due to its AI-powered detection and its ease of use. As a result, the business has been winning market share away from legacy antivirus vendors who struggle to keep up with the rapidly evolving threat environment. More than 11,000 organizations have adopted SentinelOne, with customers including half the Fortune 10, government agencies, and many of the world’s largest managed security service providers (MSSPs). MSSPs, which represent 20% to 30% of SentinelOne’s revenue, extend the company’s reach to thousands of small businesses who lack adequate IT resources to defend against cyberattacks…” (Click here to read the full text)

A computer engineer analyzing a server network for cyber security threats.

SentinelOne, Inc. (NYSE:S) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held SentinelOne, Inc. (NYSE:S) at the end of second quarter which was 34 in the previous quarter.

We discussed SentinelOne, Inc. (NYSE:S) in another article and shared the list of best cybersecurity stocks hedge funds are buying. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.


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