CrowdStrike is Going to Break to the Beyond
CrowdStrike Holdings Inc (CRWD) temporarily disrupted its multiple-week rally only for the four consecutive trading sessions, from May 30 to June 4. A short-lived wave of technical correction got the stock by 15% lower, from the levels approaching its all-time highs at nearly $360 to about $305.50. However, the leading cybersecurity company's earnings results and solid forward guidance for the rest of the year have quickly overturned the market's mood. Its share price soared by more than 7.5% already in the first hour of extended trading to touch $129.40. So, CrowdStrike is seemingly breaking beyond its former boundaries once again.
Lifting its full-year outlook for 2024 up, CrowdStrike management now sees $3.976 billion to $4.011 billion range in total sales and $3.93 to $4.03 range for its adjusted equity per shares (annual EPS). The numbers were clearly improved compared to CrowdStrike's own rather high previous estimates for $3.925 billion to $3.989 billion in sales and $3.77 to $3.97 for EPS. Separately for the current quarter from April till June, the company is modelling a move forward to $958.3-$961.2 million with 98 to 99 cents in EPS, which was markedly better than analyst pool's projections at $955 million and 91 cents, respectively.
If we take into account that CrowdStrike’s Q1 2024 revenue was at $921 million from $693 million at the same season one year before (+33%), including its $872 million of subscription cash flow vs consensus forecasts of $854 million, which represents the so-called "annual recurring revenue" (ARR), a key and financial pillar for the company's income, while its EPS added 63% YoY, then CrowdStrike's business has never been better. “CrowdStrike started the fiscal year from a position of momentum and exceptional strength, as ... [our] customers of all sizes are standardizing on the Falcon platform to achieve better security outcomes and lower their TCO (total cost of ownership)”. Falcon is the company's major service to offer detection, prevention and remediation options.
We feel that our target price for CrowdStrike now could be raised to $400 per share in nearest months, at least to pay more than 20% of additional profit to lucky investors, according to our baseline scenarios.
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