Shares of CrowdStrike Holdings, Inc. (CRWD) spiked almost 8% to close at $256.61 on June 22, following an upgrade from Stifel Nicolaus. Shares have increased almost 20% this month post its first-quarter results on June 3, compared to an increase of 14.8% over the past six months.
CrowdStrike provides cloud workload and endpoint security, threat intelligence, and cyberattack response services. (See CrowdStrike stock chart on TipRanks)
Beat-and-Raise Q1 FY22 Results
In Q1, the company’s results exceeded the Street’s estimates with earnings growth of 400% and a revenue increase of 70% compared to the prior year’s quarter. The company also gave upbeat guidance for Q2 and raised its Fiscal 2022 guidance.
For FY22, the company projects total revenue to be in the range of $1,347.0 to $1,365.7 million and earnings in the range of $0.35-$0.41 per share. The analysts’ estimates of revenue and earnings are pegged at $1.32 billion and $0.30 per share, respectively.
Analysts’ View
On June 21, Stifel Nicolaus analyst Brad Reback upgraded the stock to a Buy from a Hold rating and also increased the price target to $300 from $240, which is a 16.9% upside potential from the current levels.
According to Reback, CrowdStrike has yet to achieve its full potential on the customer acquisition front. In Q1, the company’s subscription customers increased 82.4% to reach 11,420 on a year-over-year basis.
The analyst was noted, “While CrowdStrike’s subscription customer count has nearly tripled over the last eight quarters, we continue to believe that CrowdStrike’s opportunity to source ARR growth from new customer acquisition remains very early days when considering the degree to which legacy endpoint security providers scaled their respective customer counts over time.”
As a measure to gauge CrowdStrike’s ability to scale, the analyst compares the company to its peers; Symantec’s customer count exceeded 100,000 at the time of acquisition by Broadcom Inc. (AVGO), while McAfee’s current customer count is around 50,000.
CrowdStrike’s shares have exploded 146.1% over the past year, but the stock still scores a Strong Buy consensus rating based on 16 Buys and 1 Hold. That’s alongside an average analyst CrowdStrike price target of $257.47, implying that the shares are almost fully valued at current levels.
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