SentinelOne’s Lenovo agreement may have “meaningful” earnings impact – Wells Fargo
Investing.com — SentinelOne (NYSE:S)’s new partnership with personal computer-maker Lenovo should contribute “meaningfully” to the cyber security group’s results in the next twelve months, according to analysts at Wells Fargo.
On Monday, the two companies announced that they had entered a multi-year collaboration to bring artificial intelligence-enhanced digital protection to “million of Lenovo devices across the globe.”
Under the terms of the deal, Lenovo said it will include SentinelOne’s enterprise cybersecurity platform and generative AI capabilities in its new shipments of personal computers. It will also offer upgrades to existing customers, the firm said.
Lenovo also said it will build a fresh managed detection and response service using AI from SentinelOne’s technology “as its foundation.”
“Cyber resilience is incredibly important for business continuity as organizations increasingly face the unpredictable. Our security services collaboration with SentinelOne is another key aspect of Lenovo’s cybersecurity and cyber resilience services intended to help protect customers from anomalous threats,” said Patricia Wilkey, Senior Vice President of Lenovo Solutions and Services Group International Sales, in a statement.
The Wells Fargo analysts said the partnership could add 5% in total deal value — or roughly $50 million — to SentinelOne’s annual recurring revenue in twelve months, noting that the effect would be “similar” to what peer CrowdStrike (NASDAQ:CRWD) achieved after a deal with Lenovo rival Dell (NYSE:DELL) last year.
Citing data from research group Gartner (NYSE:IT), the analysts added that Lenovo is the “top PC manufacturer,” noting that it shipped 14.8 million units in the second quarter of 2024 — translating to just under a quarter of the total PC market. Dell, by comparison, is the third-biggest PC manufacturer, accounting for 17% of the total units shipped.
Meanwhile, the analysts said that SentinelOne has been gaining market share “at the expense of CrowdStrike,” further driving revenue growth. They have an “Overweight” rating of the stock and a share price target of $30.