Crowdstrike Holdings (CRWD)

Nov 30, 2022Trade Ideas

Investors may want to keep an eye on Crowdstrike Holdings (CRWD).

In pre-market, the stock is down about $23.60 a share on guidance and warnings about economic headwinds. Revenue came in at $580.9 million, which beat estimates for $574.1 million. Subscription revenue came in at $547.4 million, beating expectations by about $2 million. Adjusted EPS of 40 cents, which beat expectations for 31 cents. Annual recurring revenue was $2.35 billion, which was in-line.

For the fourth quarter, the company expects to see revenue of $619.1 million to $828.2 million. Estimates are for revenue of $634.8 million. For the full year, it expects to see $2.22 billion to $2.23 billion, which puts it in line.

According to Yahoo Finance, “I think the commentary is what’s tripping up investors. So here we have the CEO saying total new annual recurring revenue was below our expectations as increased macroeconomic headwinds elongated sales, the sales cycles, with smaller customers and caused some larger customers to pursue multiphase subscription start dates.”

At the same time, analysts are telling investors to buy the dip. As noted by Morgan Stanley analyst Hamza Fodderwala kept an Overweight rating on the shares following the company’s Q3 report. While Q3 was “definitely worse than expected,” Fodderwala thinks last night’s results “accelerated the inevitable derisking of forward estimates” for both Crowdstrike and likely cybersecurity more broadly and would be buying amid the weakness. Crowdstrike’s positioning as a growing consolidator enables stronger share gains than peers and now “a meaningful slowdown is already priced in,” contends the analyst.

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