Crowdstrike Analyst Cautious Ahead Of Q3 Results: Retail Backs Stock As Post-Outage Recovery Continues
By Stocktwits Inc | First Published Nov 26, 2024, 11:46 PM ISTCrowdStrike is widely expected to report roughly flat earnings per share performance despite robust revenue growth.
Cloud security company CrowdStrike Holdings, Inc. ($CRWD) is scheduled to announce its fiscal-year 2025 third-quarter results after the market closes on Tuesday, and retail sentiment turned markedly upbeat ahead of the event.
Austin, Texas-based CrowdStrike is widely expected to report third-quarter non-GAAP earnings per share (EPS) of $0.81 on revenue of $982.8 million. The comparable year-ago numbers are $0.82 and $786.01 million, respectively.
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In late August, the company guided non-GAAP EPS to $0.80-$0.81 and revenue to $979.2 million-$984.7 million.
The top- and bottom-lines beat expectations in each of the past four quarters.
The spotlight is likely to be on annual recurring revenue (ARR), a key user metric, which rose 32% year-over-year to $3.86 billion in the previous quarter. Non-GAAP subscription gross margin was at a whopping 81%.
In a note released last week, Morgan Stanley analyst Hamza Fodderwala said new deal flow over the past three months have been weak, given the fallout from the July outage. A majority of the deals in the pipeline have been paused, though not cancelled, he said.
Channel checks do not indicate material churn as CrowdStrike's customer commitment packages are offering lower upfront costs/discounts, the analyst said. Expansion from existing customers beyond core endpoint security should continue to help offset weaker new logo acquisition, he added.
Fodderwala said he sees upside to net new ARR estimates in the third quarter.
Ahead of the results, the stock snagged a slew of price target hikes, the Fly reported.
The third-quarter earnings call, hosted by the management, is scheduled for 5 p.m. ET.
CrowdStrike’s full-year guidance calls for non-GAAP EPS in the range of $3.61 and $3.65 and revenue between $3.89 billion and $3.90 billion.
Retail sentiment on the Stocktwits platform has risen to the highest level since the start of the year, improving from ‘bullish’ a day ago to ‘extremely bullish’ (81/100), with message volume spiking to ‘extremely high’ levels.
CrowdStrike stock traded up 0.83% at $366.71 ahead of the quarterly results, having gained over 42% for the year-to-date period.
The stock, though recovering from the lows amid the mid-July massive IT outage, is yet to break above the pre-outage high of $398.33 hit on July 9.
A poll run by Stocktwits platform users regarding their expectations for the earnings and stock trajectory showed that 61% of the respondents expect a big third-quarter beat and a 10% post-earnings rally.
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