SentinelOne (NYSE:S) shares fell almost 5% in premarket buying and selling on Tuesday as funding agency Wells Fargo downgraded the cybersecurity firm on worries over “declining” demand and up to date govt turnover.

Analyst Andrew Nowinski lowered his score on SentinelOne (S) shares to equal weight from obese, noting that worries over the slowing demand and modifications in management will make it “harder to achieve materials profitability.”

“Our checks with resellers downticked in [fourth-quarter], with 43% of resellers reporting Under Plan outcomes, and simply 10% Above Plan (-33% internet vs -13% internet final quarter),” Nowinksi wrote in a notice to shoppers. He added that the 4 largest resellers of SentinelOne (S) all had “comparatively weak outcomes” and three of the 4 had beneath plan outcomes.

Individually, Nowinksi famous that CrowdStrike (CRWD) had extra optimistic checks and appears to have “higher momentum available in the market.”

Nowinksi additionally famous that channel companions mentioned the departures of Daniel Bernard and Raj Rajamani to go to CrowdStrike (CRWD) is “regarding,” particularly since each are “extremely regarded” within the business.

As such, Nowinksi lowered his 2024 and 2025 estimates on SentinelOne (S).

Final week, hedge fund Third Level disclosed that it had decreased its stake in SentinelOne (S) through the fourth-quarter, whereas making a number of different modifications to its portfolio.

Analysts are largely bullish on SentinelOne (S). It has a BUY score from Looking for Alpha authors, whereas Wall Road analysts charge it a BUY. Conversely, Looking for Alpha’s quant system, which constantly beats the market, charges S a HOLD.