CrowdStrike surges as Wall Street cheers cybersecurity company's results, outlook

Mar. 10, 2022 9:09 AM ETCrowdStrike Holdings, Inc. (CRWD)By: Rex Crum, SA News Editor3 Comments

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CrowdStrike Holdings (NASDAQ:CRWD) surged more than 15%, Thursday, as Wall Street threw its weight behind the cybersecurity technology company following its strong quarterly results.

Late Wednesday, CrowdStrike (CRWD) reported a fourth-quarter profit of 30 cents a share, excluding one-time items, on revenue of $431 million, while analysts had forecast the company to earn 20 cents a share on sales of $411 million. The company also reported annual recurring revenue [ARR] of $1.73 billion, which was up by 65% from a year ago, and topped analysts' expectations for $1.68 billion. ARR is seen as a key measure of CrowdStrike's (CRWD) business health as it helps measure the company's subscriber growth.

BTIG analyst Gray Powell used CrowdStrike's (CRWD) report to raise his rating on the company's stock to buy from neutral with a price target of $257 a share. Powell said CrowdStirke's (CRWD) growth in "tangential products" outside of the company's main endpoint security offerings as one of the main drivers of its recent performance.

"Tangential products" include technologies such as virtual machines and identity management software. Powell said these items are growing at an ARR of more than 100% annually, and show that CrowdStrike (CRWD) "is clearly building a second or even third leg" to it growth story.

For its full fiscal year, CrowdStrike (CRWD) said it expects to earn between $1.03 and $1.13 a share, on revenue in a range of $2.13 billion and $2.16 billion.

Along with Powell, Matthew Hedberg, of RBC Capital Market, raised his price target on CrowdStrike (CRWD) to $275 a share from $250 and maintained his outperform rating on the company's stock due to its strong results and forecast.

Hedberg cited the Russia-Ukraine conflict as aiding CrowdStrike's (CRWD) "record pipeline" of business heading into the first quarter of its fiscal year. Hedberg said CrowdStrike (CRWD) "remains in rare air" due to factors such as adding more than 1,600 customers for the third quarter in a row.

Bank of America Securities analyst Tal Liani left his buy rating and $315-a-share target price on CrowdStrike's (CRWD) stock unchanged. Liani said that the company's recent success went "beyond the core endpoint market" and that its cloud security and identity protection products at the the top of many corporate customers' minds these days.

Security companies such as CrowdStrike (CRWD) have been seen as benefiting from the war between Russia and Ukraine as businesses and governmental departments are expected to beef up their network security systems in anticipation of a rise in Russian-based cybersecurity attacks.

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