Heading into the release of CrowdStrike’s (CRWD) FQ3 earnings, investors appeared somewhat jittery. In the two preceding trading sessions, shares had collectively dropped by nearly 8%. In the end, they needn’t have worried. The cybersecurity specialist delivered the goods, whilst handsomely beating Wall Street estimates.
CrowdStrike reported revenue of $232.46 million, boasting an 85.8% year-over-year uptick and beating the Street’s forecast by $18.1 million. Non-GAAP EPS of $0.08 came in ahead of the estimates by $0.08.
Annual recurring revenue, a key metric in the SaaS space, increased by 81% year-over-year to $907.4 million. The Street expected $853.8 million.
For FQ4, the company guided for revenue between $245.5 million to $250.5 million and adjusted earnings of 8 cents to 9 cents a share. The analysts’ forecast called for revenue of $231.4 million and adjusted EPS of $0.01.
Investors might have been fearing the worst, but in contrast, heading into the print, Needham analyst Alex Henderson was expecting “another strong beat and raise.” The fact proceedings played out accordingly only reaffirmed the 5-star analyst’s conviction in the CRWD story.
While Henderson believes the cybersecurity space boasts other great companies such as Zscaler (ZS), Cloudflare (NET) and Okta (OKTA) – none are growing as fast as CrowdStrike.
“We are long-term buyers of CRWD for multi-year outperformance,” Henderson said. “While a period of consolidation is possible, we think CRWD is a unique investment vehicle with exceptional long-term value potential. CrowdStrike does security right, it really does “Stop the Breach.” We believe this is going to be a major company, and we recommend investors buy these shares, establish a core position and add on any weakness.”
Investors might have to wait for any “weakness.” Shares gained ~13% in Thursday’s trading adding to the year’s previous bounty; All in all, CRWD stock is up a whooping 223% year-to-date.
To this end, Henderson raised CRWD’s price target from $170 to $190, implying 24% upside from current levels. The analyst’s rating stays a Buy. (To watch Henderson’s track record, click here)
All in all, barring one Hold rating, all the Needham analyst’s colleagues agree with his thesis. 10 additional Buys result in a Strong Buy consensus rating. Following the strong gains, the $169 average price is set to provide investors with a 7% return over the next months. (See CRWD stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
