Raymond James analysts initiated coverage of SentinelOne, Inc. (NYSE:S) with a Strong Buy rating and $25 price target in a note Thursday.
The analysts said their firm sees multiple ways SentinelOne can get to a $10 billion type of software business over time.
"Core market expansion is hitting an S-curve inflection: Our checks indicate customers are increasingly seeking a 'best-of-platform' approach to security as opposed to a 'best of breed' for each use case," said the analysts.
"This is relevant as SentinelOne's platform has expanded from core endpoint security into various needs across key areas like XDR, SIEM, IAM, Cloud, and Network (each standalone markets in the billions."
Raymond James believes the cybersecurity company currently has less than 1% of its $100 billion total addressable market (TAM), and its 10,000 customer base is in its infancy.
"We see multiple ways to get SentinelOne to a $10B type of software business over time, and moving from an endpoint security vendor to XDR/Cloud/AI security vendor over time which should ultimately aid its valuation multiple relative to peers," the analysts added.
Tindle also noted that the company's differentiated technology strategy is resonating with their checks, while metrics trajectory is consistent with outperforming software stocks.