Crowdstrike Pulls Back Into a Buying Opportunity

Crowdstrike Pulls Back Into a Buying Opportunity

Crowdstrike Guides HIgher For The Second Time This Year

It doesn't take results from Crowdstrike (NASDAQ: CRWD) to know that strong tailwinds are blowing among internet stocks. Results from the chipmakers through device makers through e-commerce portals and all forms of cloud services providers point to continued growth if not acceleration in the industry. Crowdstrike, as a leading provider of cloud-based security services, is well-positioned To capitalize on strength within the industry, and its business is very strong. The company recently released its second-quarter earnings report to include guidance for the third quarter and the full year that exceeded the analyst’s consensus.  Not only that, but this is the second time the company has done so since the start of the fiscal year. 

The analysts, as a whole, love this stock. Data from reveals there are 25 analysts covering Crowdstrike and the consensus rating is a Strong Buy. The company has been picking up new analysts as well, adding 3 over the last month,  and there is a noticeable uptrend in the consensus price target as well. The consensus price target has increased by $60 or more than 25% over the past three months and recent activity suggests it will continue to move higher. There have been no less than 10 sell-side analysts to come out with positive commentary in the wake of the Q2 report and all have upped their price target. The consensus of the 10 latest reports is above $312 or $20 above the current consensus which leaves an upside of 11.6% and we think the stock could easily move higher. 

Crowdstrike Has A Blowout Second Quarter

Crowdstrike isn't the only company to report a blowout in the calendar second quarter but it is the latest. The company reports $337.70 in net consolidated revenue for a gain of 69.7% over last year. As strong as a 69.7% gain is, to put it into perspective you need to understand that last year the company's revenue grew 84% in the second quarter. This year's strength is on top of that. In regards to the analysts and the consensus estimate, the company beat the consensus target by 440 basis points and this, too, is saying something because the consensus estimate has been steadily rising all year.

Internal metrics we're all good as well. The company reported $1.34 in annual recurring revenue to set a new record. The ARR gain is driven by $155 million in new annual recurring revenue which is also a company record. In terms of customer accounts and new subscribers, the company reported 1660 new subs for the quarter which is a record that puts the total number of subscribers above the 13,000 mark or up 81% over last year.

Moving on to the earnings portion of the report, the results were a little mixed. The company reported a GAAP loss of $0.25 per share to miss consensus by a dime and nearly double the loss from last year. Mitigating that however, are adjusted earnings of $0.11 which beat the consensus by $0.02 and are up from last year's $0.03. 

The Technical Outlook: Crowdstrike Is Trending Higher

Crowdstrike’s second-quarter report and guidance were a little bit mixed in that earnings weren't quite as strong as they could have been but the news is otherwise very strong. In this light, the mild pullback in share prices seen in the pre-market action is best viewed as a buying opportunity and the market appears to agree with us. Shares of Crowdstrike are moderately higher in the early portion of the trading session and look like they will continue to trend higher in the near-term, mid-term, and long-term. In our view, the stock is heading up to the 325 level and may hit resistance near there within the next few weeks. 

Crowdstrike Pulls Back Into a Buying Opportunity

Companies in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
CrowdStrike (CRWD)$244.54-3.5%N/A-294.62Buy$291.46