CrowdStrike (CRWD) Shares Edge Higher on Healthy ARR Growth, Analysts Positive but Lower PTs Given Recent Multiple Compression

December 2, 2021 7:44 AM EST
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Price: $158.59 -5.19%

Rating Summary:
    26 Buy, 3 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 5 | New: 25
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Shares of CrowdStrike (NASDAQ: CRWD) are up nearly 2% in pre-open Thursday after the company reported better-than-expected Q3 results.

CrowdStrike reported Q3 EPS of $0.17 to beat the analyst estimate of $0.10. Revenue for the quarter came in at $380.1 million versus the consensus estimate of $363.48 million.

"CrowdStrike delivered a robust third quarter with broad-based strength across multiple areas of the business leading to net new ARR growth accelerating and ending ARR growing 67% year-over-year to surpass the $1.5 billion milestone. Our outstanding results this quarter demonstrate the flywheel effect of our platform and reflect continued strong customer adoption for our core products in addition to the growing success of our newer product initiatives including identity protection, log management and cloud,” said George Kurtz, CrowdStrike’s co-founder and chief executive officer.

For this quarter, CrowdStrike sees EPS between $0.19 to $0.21 on sales of $406.5 million to $412.3 million, versus the consensus that was calling for EPS of $0.16 on revenue of $400 million.

Cowen analyst Shaul Eyal reiterated an Outperform rating and a $305.00 per share price target on CRWD shares.

“CRWD's strong F3Q results and elevated FY22 guidance could put to bed some recent controversy regarding pricing pressures and competitive headwinds. We view CRWD's LT target of growing ARR to $3B by FY25 as highly feasible given its ability to sustain healthy growth rates. We are reiterating our Outperform rating and PT at $305, based on an EV to FY23E Revenue multiple of ~37x—supported by our view of CRWD being a unique asset commanding a unique valuation,” the analyst said in a client note.

Stifel analyst Brad Reback also maintained a Buy rating but lowered the price target to $285.00 per share from the prior $315.00 given the meaningful recent contraction in peer group multiples.

“We continue to believe CRWD's growth opportunity remains in the early days, especially given the ample runway remaining to source incremental ARR from new customers across its core endpoint security market. Net/net, we believe the company's growing product set should expand its competitive moat over time, and should enable CRWD to sustain 40%+ y/y ARR growth over the next several years,” the analyst commented.

CrowdStrike shares closed at $201.50 yesterday.

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