Cybersecurity is so essential in today's connected world that the Biden administration released a national strategy in March incentivizing businesses to implement it. After all, cyberattacks are a significant threat.

Ransomware attacks alone happen every 11 seconds, according to the U.S. Cybersecurity and Infrastructure Security Agency. And in June, several U.S. government agencies, including the Department of Energy, as well as Johns Hopkins University, were hit by a cyberattack.

Because of this constantly lurking threat, the cybersecurity market is forecast to grow from $147 billion last year to more than $256 billion by 2028. And that provides a tailwind for SentinelOne's (S 1.70%) revenue growth.

Yet the company's stock price hovers near a 52-week low at the time of this writing. This creates a potential buy opportunity.

So is SentinelOne stock a good long-term investment, or does its share price decline signal you should stay away? Let's dig into the company to answer that question.

SentinelOne's success

A factor in SentinelOne's favor is its cybersecurity platform's use of artificial intelligence (AI), a core component of the platform since the company's founding in 2013. AI is an important tool against cyberthreats because it has the ability to accurately identify and address attacks in real time.

SentinelOne's AI technology helped the company attract customers and rapidly grow revenue. In SentinelOne's 2023 fiscal year, ended Jan. 31, revenue increased a whopping 106% year over year to $422.2 million over fiscal 2022's $204.8 million.

This success extended into SentinelOne's fiscal first quarter, ended April 30, as the company expanded its customer base by 43% over the prior year. This led to a 70% year-over-year jump in revenue as the company hit $133.4 million, up from $78.3 million last year.

SentinelOne continues to evolve its platform, and introduced generative AI capabilities in April. This form of artificial intelligence incorporates natural language, allowing its human users to interact with the platform in everyday vernacular for such tasks as evaluating the AI's security improvement recommendations.

SentinelOne's challenges

Despite its impressive revenue growth, SentinelOne's share price dropped after the company released its fiscal Q1 earnings on June 1. The decline was due in part to the company missing its Q1 revenue target of $137 million, coming in at $133.4 million instead.

SentinelOne blamed the missed revenue target on challenging macroeconomic conditions, such as rising interest rates and inflation. These conditions caused a slowdown in signing up new clients while existing clients tightened their spending with SentinelOne.

As a result, the company lowered its full-year forecast from at least $631 million to $590 million. Although the $590 million target is a solid 40% increase over the prior year's $422 million, the lower 2024 fiscal forecast contributed to the decline in SentinelOne's share price.

To buy or not to buy SentinelOne stock

Although the company faces challenges this year, SentinelOne possesses several factors that make it a compelling investment.

The company exited Q1 with a strong balance sheet. Assets totaled $2.2 billion while total liabilities were $595.6 million. Cash, cash equivalents, and investments were more than $700 million, and the company has no debt.

As is the case with many tech companies prioritizing growth over profits, SentinelOne is not yet profitable. But the company is working toward achieving profitability in fiscal year 2025, and in response to the tough macroeconomic environment, is cutting costs through actions such as reduced hiring and leaning on AI to streamline operations.

Moreover, the company's international business provides a growth opportunity. International revenue grew 84% year over year in Q1, reaching $47.3 million, up from $25.7 million in the prior year. The company is successfully growing international income, expanding its contribution to total revenue from 27% in fiscal year 2020 to 35% in fiscal 2023.

One quarter of a missed revenue target is not indicative of a trend, and SentinelOne has taken steps in response to an uncertain macroeconomic environment.

Meanwhile, the company continues to forecast double-digit revenue growth. SentinelOne expects revenue in fiscal Q2 to come in at $141 million, up 37% from the prior year's $103 million. All of these factors combined with a cybersecurity market with years of growth ahead make SentinelOne a buy.