While the International Monetary Fund recently cut its growth projections for the U.S. economy, it also raised its unemployment-rate estimates through 2025. The fund also warned that a significant surge in inflation poses “systemic risks” to both the country and the global economy.
In addition, Goldman Sachs slashed its second-quarter outlook for GDP to just 0.7%, down from the earlier expectation of a 1.9% increase. This, combined with a decline of 1.6% in the first quarter, indicates that the economy is headed toward a recession.
The June Consumer Price Index (CPI) is expected to be hotter than May’s. According to Dow Jones, Headline CPI is estimated to rise by 1.1%, compared with 1% in May. The new inflation data is expected to keep the Federal Reserve on a hawkish path and raise interest rates aggressively.
According to Bank of America analysts, the multi-decade high inflation and consequent interest rate hikes will push the U.S. economy into a deep recession.
Amid this backdrop, CrowdStrike Holdings, Inc. (CRWD) and Tractor Supply Company (TSCO) have been impervious to market shocks this year and have the underlying strength to continue outperforming the market. So, these stocks can be solid additions to your watchlist.
CrowdStrike Holdings, Inc. (CRWD)
CRWD offers cloud-delivered protection across endpoints, cloud workloads, identity, and data. It offers threat intelligence, managed security services, IT operations management, threat hunting, Zero Trust identity protection, and log management.
Last month, CRWD introduced CrowdStrike Asset Graph, a new graph database powered by the CrowdStrike Security Cloud that provides IT and security leaders with a 360-degree view into all assets (both managed and unmanaged) alongside unprecedented visibility into their attack surface across devices, users, accounts, applications, cloud workloads, operational technology (OT) and more to simplify IT operations and stop breaches.
Also, last month, CRWD introduced Humio for Falcon, a new capability that extends data retention of CrowdStrike Falcon telemetry for one year or longer, improving threat analytics and threat-hunting abilities for organizations and helping them meet compliance requirements.
During the Q1 conference call, CRWD’s CFO, Burt Podbere, said that CRWD’s gross retention rates had reached an all-time high. He also added that the “number of customers adopting six or more and seven or more modules both more than doubled year-over-year.”
CRWD’s total revenue increased 61.1% year-over-year to $487.83 million during the first quarter ending April 30, 2022. Its Non-GAAP income from operations amounted to $83 million, up 178.7% from its prior-year quarter, while its Non-GAAP net income increased 221.4% from its year-ago value to $74.79 million. The company’s Non-GAAP EPS rose 210% year-over-year to $0.31.
The consensus EPS estimate of $0.27 represents a 149.6% improvement year-over-year during the second quarter ending July 2022. Analysts expect CRWD's revenue to increase 52.9% year-over-year to $516.22 million during the second quarter ending July 2022.
In addition, the company has an impressive earnings history as it surpassed the consensus EPS estimate in all of the trailing four quarters. The stock has gained 3% over the past month.
CRWD’s POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has a B grade for Sentiment, Quality, and Growth. Within the F-rated Software - Security Industry, it is ranked #12 of 29 stocks.
To see additional POWR Ratings for Stability, Value, and Momentum for CRWD, click here.
Tractor Supply Company (TSCO)
TSCO functions as a rural lifestyle retailer in the United States. The company offers a selection of merchandise, including equine, livestock, pet, and small animal products necessary for their health, care, growth, and containment; hardware, truck, towing, and tool products.
Last month, TSCO announced exclusive sweepstakes in partnership with The Toro Company, a worldwide leader in providing innovative solutions for the outdoor environment. “Tractor Supply customers have a strong passion for the outdoors," said Randall Dodds, Vice President and Divisional Merchandise Manager at Tractor Supply.
In April, TSCO announced a partnership with the Robert Bosch Tool Corporation, a global leader for power tools and power tool accessories, to add two reputed brands to its lineup. TSCO now offers Dremel rotary, oscillating, and multi-saw tools and will feature Bosch Power Tool products in nearly 1,000 locations by the end of 2022.
Tractor Supply’s CEO Hal Lawton said, “The strength of our needs-based, demand-driven business continues as the team is effectively managing inventory levels, inflationary costs, and pressures across the global supply chain.”
In the first quarter ending March 26, 2022, TSCOs net sales increased 8.3% year-over-year to $3.02 billion. Its operating income grew 6% from its year-ago value to $244.29 million, while its net income amounted to $187.23million, up 3.2% from its year-ago value. The company's EPS improved 6.5% year-over-year to $1.65.
Analysts expect TSCO's revenue to increase 8.2% year-over-year to $3.90 billion for the second quarter ending June 2022. The company's EPS is expected to grow 10% year-over-year to $3.51 in the second quarter ending June 2022. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters.
The company’s shares have surged 5.2% over the past year.
TSCO's strong fundamentals are reflected in its POWR Ratings. The stock has a B grade for Sentiment. Within the C-rated Specialty Retailers industry, it is ranked #31 of 46 stocks.
In total, we rate TSCO on eight different levels. Beyond what we've stated above, we have also given TSCO grades for Value, Growth, Quality, Momentum, and Stability. Get all the TSCO ratings here.
CRWD shares rose $1.09 (+0.63%) in premarket trading Wednesday. Year-to-date, CRWD has declined -14.83%, versus a -19.22% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
2 Strong Stocks That Have a High Chance of Beating the Market StockNews.com
