Shares of the global cybersecurity company CrowdStrike (NASDAQ:CRWD) closed over 8% higher on Monday, May 8. While there was no company-specific reason, its peer Zscaler (NASDAQ:ZS) announced stronger-than-expected preliminary Q3 results, likely boosting investors’ confidence in cybersecurity companies, including CRWD.
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After underperforming the broader markets in 2022, CRWD stock is up about 26% year-to-date. The company is rapidly increasing its subscription customer base, which includes top banks and leading Fortune 500 companies. Furthermore, CRWD is witnessing more customers adopting its multiple modules, which will likely drive higher average revenue per user and support margins.
Thanks to its growing customer base, CRWD’s subscription ARR (annual recurring revenue) remains strong.
CRWD will release its Q1 financial results for Fiscal 2024 after the market closes on Wednesday, May 31. Management expects to report revenues in the range of $674.9 – $678.2 million, reflecting a year-over-year growth of 38-39%. Analysts expect CrowdStrike to report total revenue of $677.38 million.
CrowdStrike has consistently exceeded analysts’ earnings forecast over the past several quarters. (See the image below).
As for Q1, the company expects to report earnings in the range of $0.50 to $0.51 per share compared to an EPS of $0.31 in the prior year. Analysts expect CRWD to post earnings of $0.51 a share in Q1.
On May 1, Catharine Trebnick of Rosenblatt Securities initiated coverage on CRWD stock with a Buy recommendation and a price target of $170.
The analyst expects CRWD to benefit from its differentiated cloud-security platform, operating margin leverage, and “extensible platform reach” that exceeds traditional endpoints like PCs and laptops.
Trebnick expects CrowdStrike to continue to deliver strong free cash flow growth at scale, which will support the premium valuation.
What’s the Prediction for CRWD Stock?
CRWD stock has a Strong Buy consensus rating on TipRanks, reflecting 30 Buy and three Hold recommendations. Analysts’ average price target of $167.60 implies 26.58% upside potential.
