Keithen Drury, The Motley Fool

Sat, Jun 14, 2025, 3:00 AM5 min read

• SentinelOne's valuation is quite cheap despite the company's strong growth.

• Okta's offerings can provide a key part of a strong cybersecurity solution.

• 10 stocks we like better than SentinelOne ›

Cybersecurity is one industry that doesn't take a break. Hackers become more dangerous every year, so ensuring that a company has a top-notch cybersecurity protection plan is critical. This makes it an excellent industry to invest in, as it's practically recession-proof. Most companies will find many other places to cut expenses before they trim their cybersecurity budgets.

The industry is large, and there are multiple facets to a rock-solid cybersecurity plan, which is why many companies utilize services from multiple vendors. As a result, there are multiple great cybersecurity companies to invest in.

Two that I think are solid buys right now are SentinelOne (NYSE: S) and Okta (NASDAQ: OKTA).

SentinelOne offers AI-first endpoint protection software. Endpoints are all the devices that can access a company's network, like smartphones or laptops. If a bad actor can access a network through one of these devices, they can have free rein over the company's data, which could be a disaster.

SentinelOne is just one competitor among many in the endpoint protection space, but its most notable peer is CrowdStrike (NASDAQ: CRWD). I've been a CrowdStrike bull for a long time, but given how expensive the stock has become, it's just not a buy today. Shares of SentinelOne, which offers a similar product, are much more reasonably priced, and the company is achieving strong growth.

The best metric to use when evaluating both companies is the price-to-sales (P/S) ratio, as neither is reliably profitable yet.

At 6.7 times sales, SentinelOne is cheap for a software stock, as most software companies trade between 10 and 20 times sales. CrowdStrike is at the high end of that range; however, it's not growing as fast as SentinelOne.

Both companies' fiscal 2026 first quarters ended on April 30. During that quarter, CrowdStrike's revenue grew 20% year over year to $1.1 billion and its annual recurring revenue (ARR) rose 22% to $4.44 billion. SentinelOne's revenue rose 23% to $229 million, while its ARR increased by 24% to $948 million.

The differences in valuation between these two largely come down to two factors. First, CrowdStrike is a much larger business and has already captured a significant chunk of the cybersecurity market. Second, CrowdStrike appears close to achieving consistent profitability. SentinelOne is light years away from doing so.