CrowdStrike: Time To Pick Up The Pieces After This Share Price Implosion

Dec. 08, 2022 12:18 AM ETCrowdStrike Holdings, Inc. (CRWD)18 Comments
Bert Hochfeld profile picture
Bert Hochfeld
21.11K Followers

Summary

  • CrowdStrike shares cratered after the company lowered revenue guidance both for this current quarter and for FY 2024.
  • Like many other software companies, this one is experiencing a demand growth slowdown due to macro headwinds.
  • In the case of CrowdStrike, a demand growth slowdown means growth in the low mid-30% range coupled with rising operating and free cash flow margins.
  • The shares, while not cheap by some definitions, sport a Rule of 40 metric well above 60 even after considering the macro headwinds.
  • The company is not losing share, and some of its latest technology initiatives are resonating strongly with users.

Crowdstrike headquarters in Silicon Valley

Sundry Photography

CrowdStrike: A less emotional reaction to a “messy” quarter

CrowdStrike (NASDAQ:CRWD) reported its earnings a little more than a week ago. While the earnings themselves were more than satisfactory, the guidance was judged wanting, the company's calculated

This article was written by

Bert Hochfeld profile picture
21.11K Followers
Bert Hochfeld graduated with a degree in economics from the University of Pennsylvania and received an MBA from Harvard. Mr. Hochfeld has enjoyed a long career in the tech world, working for IBM, Memorex/Telex, Raytheon Data Systems, and BMC Software. Starting in the 1990s, Mr. Hochfeld worked as a sell-side analyst and won awards from the Wall Street Journal for his coverage of the software space. In 2001, Mr. Hochfeld formed his own independent research company, Hochfeld Independent Research Group, which provided research services to major institutions including Fidelity, Columbia Asset, SAC Capital, and many other prominent institutions and hedge funds. He also operated the Hepplewhite Fund, a hedge fund that specialized in technology investments. Hedge Fund Research, an independent 3rd party firm that specializes in ranking managers, rated the Hepplewhite Fund as the best performing small-cap fund for the 5 years ending in 2011. In 2012, Mr. Hochfeld was convicted of misappropriating funds from a hedge fund he operated. Mr. Hochfeld has published more than 500 articles on Seeking Alpha, all dealing with companies in the information technology space. Highly esteemed for his investment wisdom accumulated over decades, Mr. Hochfeld ranks in the top 0.1% of Tip Ranks analysts for his selection of information technology stocks and their subsequent successes.

Disclosure: I/we have a beneficial long position in the shares of CRWD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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