'The Crowd is Getting Better': CrowdStrike (CRWD) Falls Despite Topping Estimates as Strong Results Likely Priced In, Analysts Raise PTs on 'Another Strong Quarter'
Shares of CrowdStrike (NASDAQ: CRWD) are down over 3% in pre-open Wednesday despite the fact that the cybersecurity company delivered stronger-than-expected results and guidance.
CrowdStrike reported Q2 EPS of $0.11 to beat the analyst estimate of $0.09. Revenue for the quarter came in at $337.7 million versus the consensus estimate of $323.13 million.
"CrowdStrike delivered an outstanding second quarter with rapid subscription revenue growth and record net new ARR generated in the quarter. We saw strength in multiple areas of the business, added $151 million in net new ARR and grew ending ARR 70% year-over-year to exceed $1.34 billion. The success of our platform strategy and our growing brand leadership have led to a groundswell of customers turning to CrowdStrike as their trusted security platform of record. We believe that our extensible Falcon platform, purpose-built to leverage the power of the cloud, collecting data once and reusing it many times, is a fundamental cornerstone to building a durable growth business over the long-term," said George Kurtz, CrowdStrike’s co-founder and chief executive officer.
On the outlook front, CRWD projects Q3 2022 EPS of $0.08 and $0.10, with the midpoint of the guidance coming in line with the $0.09 analyst estimate. CRWD sees Q3 2022 revenue between $358 million and 365.3 million, again higher than the $350.92 million analyst consensus.
Full-year EPS is projected to come in between $0.43 and $0.49 to easily beat the analyst consensus of $0.40. Full-year revenue is projected between $1.391-1.408 billion versus the consensus of $1.36 billion.
Stifel analyst Brad Reback raised the price target to $315.00 per share from $300.00 on the Buy-rated CRWD as Q2 showed an acceleration in the customer acquisition.
“CrowdStrike F2Q22 results exceeded consensus estimates across all major financial metrics. As we highlighted in an earlier note, we believe CrowdStrike's growth opportunity comes from its ability to source ARR from net new customers and through expanded utilization across its install base, and during Q2, CRWD did just that, reporting a record 1,660 customer adds with record multi-product adoption,” Reback said in a client note.
“Despite CrowdStrike's scale, we continue to believe that its growth opportunity remains in the early days, given the ample runway remaining to source ARR growth from both continued share capture within its core endpoint security market and incremental module adoption as the Falcon Platform is increasingly leveraged as a vehicle of workload security. We continue to believe that the company's competitive moat will grow increasingly defined over time, underpinning the competitive differentiation that we expect to drive 35%+ y/y ARR growth over the next several years.”
RBC analyst Matthew Hedberg also raised the price target to $315.00 per share from $300.00 following a “very strong quarter.”
“We feel it's a good time to take a step back to appreciate the consistency of execution and beat and raise cadence of this model at scale. The land-and-expand motion continues to show the long-term potential for elevated growth and profitability as they have +13K customers, which in our view could increase 10x or more with plenty of expansion opportunities,” Hedberg wrote in a note sent to clients.
“While results remain impressive, we continue to feel CrowdStrike is in the early innings both in terms of lands, as management noted legacy players that had +100K customers, as well as the expansion opportunity of the install base leveraging its common-platform.”
Shares of CRWD closed over 18% higher in the last week after numerous Street research firms already raised their price targets expecting a strong quarter from the cybersecurity company.