Shares in CrowdStrike Holdings climbed on January-quarter profit and revenue that beat consensus estimates. Also, revenue guidance came in above Wall Street targets, sending CRWD stock higher.
The cybersecurity firm reported fourth quarter earnings after the market close on Tuesday.
"CrowdStrike exceeded fairly modest fiscal Q4 expectations," said Deutsche Bank analyst Brad Zelnick in a report. "While the macro environment remains challenging, overachievement in the quarter seems largely attributable to a strong close in January along with increased traction down market, perhaps at the expense of SentinelOne."
SentinelOne reports earnings on March 14.
CrowdStrike earnings for the fourth quarter rose 57% to 47 cents a share on an adjusted basis. Revenue, including acquisitions, jumped 48% to $637.4 million.
CrowdStrike stock analysts polled by FactSet had projected CrowdStrike earnings of 43 cents a share on revenue of $625 million for the period ended Jan. 31.
A year earlier, the Sunnyvale, Calif.-based cybersecurity firm earned 30 cents a share on revenue of $431 million.
For the current quarter ending in April, CrowdStrike forecast revenue of $676.5 million, topping estimates of $663.3 million.
CRWD Stock Pops Higher
"We see revenue growth guidance as a good starting point in a challenging macro environment, with an opportunity to build from here," said RBC Capital analyst Matthew Hedberg in a report. "Fiscal 2024 operating income and net income guidance were all ahead versus consensus estimates."
CrowdStrike stock rose 3.2% to close at 128.92 on the stock market today.
"Fears over pricing pressure from competitors' aggressive discounting did not materialize as ASPs remained stable," said William Blair analyst Jonathan Ho in a report.
CrowdStrike's Key Financial Metric
With CrowdStrike, Wall Street focuses on annual recurring revenue, or ARR. It's a financial metric tied to subscription services growth.
In the fourth quarter, ARR increased 48% to $2.56 billion. Analysts had predicted ARR of $2.515 billion.
"Management said the emerging products contributed $182 million in net new ARR in fiscal 2023 (22% of the $828 million)," said Wells Fargo analyst Andrew Nowinski in a report.
Some analysts say guidance could be conservative.
At Goldman Sachs, analyst Gabriela Borges said in a report: "CrowdStrike maintained its expectation for net new ARR to be flat to up slightly in fiscal 2024, from a higher base, and noted that the macro environment (budget scrutiny, deal elongation) is consistent with three months ago."
Heading into the CrowdStrike earnings report, CRWD stock had climbed 21% thus far in 2023. But CRWD stock owned an IBD Relative Strength Rating of only 22 out of a best-possible 99, according to IBD Stock Checkup.
The cybersecurity company uses machine learning, a form of artificial intelligence, in its products. Meanwhile, it uses a specialized database to detect malware on laptops, mobile phones and other devices that access corporate networks.
In addition, CrowdStrike stock is one of many cybersecurity stocks to watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
