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Private equity is the most likely buyer of cybersecurity firm SentinelOne (NYSE:S), according to a Needham analyst, after a Reuters report Monday that the company is exploring its options.
While it’s possible that Google (GOOGL), Microsoft (MSFT), IBM (IBM), or Palo Alto Network (PANW) may find a SentinelOne (S) acquisition interesting, most of these companies already have end-point products in their portfolios, Needham analyst Alex Henderson, who has a buy rating and $19 price target on SentinelOne, wrote in a note on Tuesday.
Henderson believes it’s most likely SentinelOne (S) remains public or is acquired by a private equity shop.
SentinelOne (S) is trading at 5.5x EV/Sales on Needham’s CY24 estimate, and Henderson sees a takeout valuation in the 7x–8x range.
If SentinelOne (S) is acquired, it likely benefits direct competitor CrowdStrike (CRWD), as the company would gain market share, benefit from less price aggression, and improve its “channel/MSSP” positioning, according to Needham’s Henderson.
