CrowdStrike Stock Pops After Beat-And-Raise Quarter

CrowdStrike Holdings (CRWD) stock is trading higher Wednesday after the cybersecurity company beat top- and bottom-line expectations for its fiscal first quarter and lifted its full-year forecast.

In the three months ended April 30, CrowdStrike's revenue increased 33% year-over-year to $921 million and its earnings per share (EPS) were up 63.2% from the year prior to 93 cents. CRWD also said its free cash flow jumped 41.8% year-over-year to $322.5 million, representing 35% of revenue.

"CrowdStrike started the fiscal year from a position of momentum and exceptional strength," thanks to impressive increases in annual recurring revenue, CrowdStrike co-founder and CEO George Kurtz said in a statement. The company's Falcon platform "creates a wide competitive moat and uniquely enables CrowdStrike to solve the industry's biggest cybersecurity, IT and data problems. Customers of all sizes are standardizing on the Falcon platform to achieve better security outcomes and lower their total cost of ownership."

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CRWD's results easily beat analysts' expectations. According to Yahoo Finance, Wall Street was anticipating revenue of $905 million and earnings of 89 cents per share.

For the second quarter, CrowdStrike said it expects revenue in the range of $958.3 million to $961.2 million and EPS in the range of 98 cents to 99 cents. The guidance is ahead of analysts' average estimates for revenue of $954.4 million and earnings of 91 cents per share.

As a result of the strong start to its fiscal year, CrowdStrike raised its full-year outlook. The company now anticipates revenue of $3.98 billion to $4.01 billion and earnings per share to arrive between $3.93 to $4.03, up from its previous guidance of revenue in the range of $3.92 billion to $3.99 billion and earnings in the range of $3.77 per share to $3.97 per share.

Is CrowdStrike stock a buy, sell or hold?

Today's earnings-related upside is just more of the same for the cybersecurity stock. Indeed, CrowdStrike has been a big winner so far in 2024, rising more than 25% for the year to date as of this writing.

Analysts think there is plenty of upside from here too. According to S&P Global Market Intelligence, the consensus analyst target price for CRWD stock is $397.36, representing implied upside of more than 20% to current levels. Meanwhile, the consensus recommendation is a Strong Buy.

Speaking for the bulls is Jefferies analyst Joseph Gallo, who maintained a Buy rating on the tech stock after earnings. The company is well-positioned to benefit from rising demand for all things generative artificial intelligence (GenAI), Gallo says, adding that there are "many levers for CRWD to derive revenue from the GenAI lifecycle via its data loss protection product, data organization and governance (via Flow), and increase in cloud workloads driving cloud security."

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