SentinelOne (S) stock fell 20% after announcing layoffs and minimal guidance

TLDR

• SentinelOne stock fell about 20% in the premarket on Friday after announcing an 8% workforce reduction while focusing on investing in artificial intelligence.
• Adjusted earnings per share for the first quarter of fiscal 2027 were 4 cents, double last year and above Wall Street estimates of 2 cents.
• Revenue rose 21% to $277 million, roughly in line with the analyst consensus of $277.3 million.
• Q2 revenue guidance of $290 million (midpoint) came in below estimates of $292 million, raising investor concerns.
• Full-year revenue forecast at $1.195 billion-$1.205 billion, with EPS guidance of 32 to 38 cents.

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SentinelOne stock was trading at about $14.91 in early Friday sessions, down about 17-20% from Thursday’s close of $18.02, after the cybersecurity company dropped two pieces of news at once: a strong first-quarter earnings beat and a plan to cut 8% of its workforce.

Sentinel One Inc., S.C

The stock has been on a strong climb heading into earnings — up 27% in May alone and 20% year to date. This momentum was quickly reversed.

The restructuring plan includes reducing the number of full-time employees by approximately 8%. The company said the savings will be redirected toward artificial intelligence, data and cloud infrastructure.

$s (Sentinel One) #Profits outside: pic.twitter.com/NsT19Ni3ZR

– Earnings Reporter (@earnings_guy) May 28, 2026

SentinelOne expects to incur a one-time charge of approximately $25 million as a result. This includes $12 million to $14 million in severance payments and $10 to $12 million in stock-based compensation. Most of the restructuring is expected to be completed in the second quarter.

CEO Tomer Weingarten framed it as a strategic shift. “Companies realize that securing the age of AI requires defending machine speed, which only truly modern infrastructure can achieve,” he said in the earnings release.

Q1 numbers beat, but Q2 guidance falls short

As for the headline numbers, the first quarter was a win. Adjusted earnings per share of 4 cents topped the consensus of 2 cents. Revenues of $277 million were up 21% year-over-year and largely in line with estimates of $277.3 million.

Annual recurring revenue (ARR) was $1.163 billion, up 23% and ahead of estimate of $1.16 billion.

But investors focused on the future outlook. Q2 revenue guidance of $290 million (midpoint) missed the consensus of $292 million — a small gap, but enough to raise questions about the back half of the year.

JPMorgan analyst Brian Essex noted a “decoupling of revenue growth and ARR,” attributing this in part to a large managed service provider deal where revenue recognition would be delayed due to the sloped deal structure.

TDCoin analyst Shaul Eyal put it more clearly: “Lukewarm second-quarter growth forecasts point to a potential slowdown in the back half of the year, with the 2027 fiscal outlook now looking riskier.”

Forecasts have been maintained for the full year

Despite missing the second quarter, Guardian One It kept its full-year 2027 financial guidance intact. Revenues are still expected to range between $1.195 billion and $1.205 billion. Adjusted EPS guidance remains at 32-38 cents per share.

Wall Street is currently modeling full-year EPS of 34 cents and revenue of $1.2 billion — exactly in line with management’s range.

The company also raised its fiscal margin forecast for 2027. JPMorgan’s Essex acknowledged that positive but notable growth is what the market cares about most for a stock like this.

SentinelOne competes directly with Crowd StrikeMicrosoft and Palo Alto Networks.

Heading into earnings, the stock has formed a cup base with a technical entry point of 21.40. This level is now well above where the stock is trading.

SentinelOne carries an IBD Composite Rating of 88 out of 99, with an Accumulation/Distribution Rating of A-minus as of Thursday’s close.