CrowdStrike Wows Analysts With Execution: 'Difficult Not To Be Impressed'
Shares of Crowdstrike Holdings Inc (NASDAQ: CRWD) were slipping Friday, giving back some of the strong gains they've notched since their June IPO.
The weakness has come despite the cybersecurity company's beat-and-raise second-quarter report Thursday.
The Analysts
JMP Securities analyst Erik Suppiger reiterated a Market Outperform rating on CrowdStrike with a $90 price target.
Bank of America Merrill Lynch analyst Tal Liani reiterated a Buy rating and $103 price target.
Mizuho Securities analyst Gregg Moskowitz maintained a Buy rating and $105 price target.
JMP: CrowdStrike Is Attractively Valued
In its first full quarterly results as a public company, CrowdStrike sustained triple-digit annual recurring revenue growth thanks to accelerating new customer growth and sustained robust retention rates, Suppiger said in a note.
Gross margins exceeded the firm's estimate by 290 basis points, which helped improve operational efficiencies, the analyst said.
The company is executing on its platform strategy, with 50% of customers buying four products are more, he said.
"We view the company's ability to sell a broad solution as a reflection of its increasingly strategic value to customers and a validation of its significant differentiation."
Notwithstanding the modest premium valuation, JMP believes the shares are attractively valued given the company's compelling fundamentals and its track record of sustaining triple-digit ARR growth.
See also: Analysts Weigh In On VMware Earnings, Buyout Deals
BofA: All Key Metrics Are In Right Direction
CrowdStrike is executing well, displacing endpoint providers and expanding the endpoint wallet share with customers, BofA's Liani said in a Friday note.
All key metrics are improving, the analyst said.
"We see consolidation of endpoint features as a major theme in security, and believe CrowdStrike is best positioned for the trend with its single-agent approach."
BofA sees the traction with Amazon.com, Inc. (NASDAQ: AMZN)'s AWS and the Symantec Corporation (NASDAQ: SYMC) M&A uncertainty as other key positives, with the latter opening a key displacement opportunity in the market.
Citing CrowdStrike's strong third-quarter guidance and the better-than-expected fourth-quarter expectations, BofA raised its estimates.
To reflect recent weakness across peers, BofA reduced the valuation multiple from 35 times to roughly 33 times.
Mizuho: Difficult Not To Be Impressed
The 20% retracement in the shares over the last two weeks render CrowdStrike stock even more attractive, Mizuho analyst Moskowitz said in a Friday note.
" ... Despite a premium valuation, we expect that strong execution should propel CRWD's stock higher," the analyst said.
While noting that CrowdStrike is a high expectation stock, Moskotwitz said he finds it difficult "not to be impressed by these results."
The Price Action
CrowdStrike shares, which have jumped over 150% from its IPO price of $34, were last seen slipping 12.76% to $75.71 at the time of publication Friday.
Related Link: CrowdStrike Hikes IPO Price Range
Latest Ratings for CRWD
Date | Firm | Action | From | To |
---|---|---|---|---|
Mar 2022 | Barclays | Maintains | Overweight | |
Mar 2022 | Canaccord Genuity | Maintains | Buy | |
Mar 2022 | Deutsche Bank | Maintains | Buy |
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