CrowdStrike (CRWD, Financial) is experiencing a notable increase in its stock price today, up 5.44%, following its recent earnings announcement. The cybersecurity company's fiscal Q2 results exceeded Wall Street expectations, driving positive investor sentiment.
For fiscal Q2 ending July 31, CrowdStrike reported adjusted earnings per share of $1.04 on revenue of $963.87 million. Analysts had expected adjusted earnings of $0.97 per share on revenue of $958.32 million. This represents a year-over-year revenue growth of 31.7%, with an adjusted gross margin of 81%, up from 80% in the same quarter last year. Adjusted earnings per share rose approximately 40.5% compared to $0.74 per share in the prior-year quarter.
For Q3, CrowdStrike’s guidance projects sales between $979.2 million and $984.7 million, which is below the average analyst estimate of $1.01 billion. Full-year guidance forecasts annual revenue between $3.89 billion and $3.9 billion, missing Wall Street's target of $3.96 billion. Management also projected adjusted earnings per share between $3.61 and $3.65, below the analyst estimate of $3.91. Despite the lower-than-expected guidance, it was not as severe as many feared, especially after last month's software update bug led to widespread computer outages.
Currently, the stock price for CrowdStrike (CRWD, Financial) stands at $278.58. The company's market cap is $67.8 billion, with a price-to-earnings (P/E) ratio of 525.62. Notably, CrowdStrike has a high Piotroski F-Score of 8, indicating a very healthy financial situation, and an Altman Z-Score of 9.97, which suggests strong financial stability. Additionally, its operating margin and gross margin are expanding, signaling potential for continued profitability.
However, there are areas of concern. The company's return on invested capital (ROIC) is less than its weighted average cost of capital (WACC), suggesting it might not be capital efficient. Moreover, insider selling activity has been noted, with 12 insider transactions reported over the past three months, involving the sell of 140,519 shares.
Despite these concerns, CrowdStrike holds a GF Value rating of "Modestly Undervalued," implying the stock may be trading below its intrinsic value. The GF Value for CrowdStrike is estimated at $355.50, suggesting potential upside. For more details, visit the GF Value page.
