Is CrowdStrike a buy on this pullback?
It’s time to talk about another up and coming digital technology name! Here is the breakdown on $CRWD, otherwise known as CrowdStrike.
Current Price: $131.06
52/Wk High: $153.90
52/Wk Low: $31.95
Market Cap: $28.8 billion
Read below for the breakdown!
CrowdStrike is a major cloud company which provides a series of endpoint security solutions through the cloud. The company’s main focuses are within antivirus protection, EDR solutions, and much more.
Crowdstrikes core platform called Falcon collects data in realtime and protects systems from viruses, therefore being deemed an anti-virus cloud software.
Throughout COVID-19 the cloud stocks and companies have been growing at an extremely fast rate. While the stock has run an already huge amount this year the outlook is terrific and the stock could be a solid buy.
Infact, throughout the second quarter of 2021 CrowdStrike added 969 new subscription customers, bringing total subscription customers to a grand total of 7,230 representing 91% year-over-year growth.
Taking a look at the most recent quarter, Q2 2021, CrowdStrike beat expectations with and EPS of $0.03 versus the EPS consensus estimate of $-0.01.
Furthermore, revenues also continued to grow significantly, with total revenues landing at $199 million, representing 84% year-over-year growth.
Breaking revenues down subscription revenues grew 89% year-over-year landing at a whopping $184.3 million. Annual Recurring Revenues also grew, adding $104.5 million to CrowdStrikes APR in Q2, now totalling $790.6 million.
When it comes to income CrowdStrike reported a GAAP income from operations loss of $-30 million but did deliver solid non-GAAP income from operations of $7.8 million.
Cash Flow from operations also improved, coming in at $55 million for Q2 2021, well above the same time 2020 cash flow from operations level of $6.2 million.
CrowdStrike management delivered solid guidance as well. Management expects Q3 2021 revenues to land within a range of $210.6 million to $215.00 million.
Management also expects solid full year results, with total revenues for fiscal year 2021 estimated to land within the range of $809.1 million to $826.7 million.
CrowdStike is also solid on the balance sheet side of things, with assets and cash far out weighting liabilities.
Total Debt: None
Total Liabilities: $826 million
Total Assets: $1.617 billion
Cash & Short Term Inv: $1.065 billion
Given the financial side of things, the valuation has gotten stretched on a negative note.
Price to Sales: 41.42x
Price to Book: 34.22x
Taking in the numbers the analysts are quite bullish with the mean price target on CrowdStrike being $159.68/share, representing a 21.74% gain.
CrowdStrikes high price target is $176.00/share, representing a 34.18% gain, while the low price target is $125.00/share, representing a -4.70% loss.
The big money is also bullish, with 73.54% of CrowdStrike being owned by institutions. Top holders including The Vanguard Group, T. Rowe Price Associates, and Jennison Associates.
When it comes to the technicals it seems the stock could be presenting an opportunity. According to the six-month charts the MACD is running flat with slight downward momentum within a tight range around -1.2971.
Furthermore, the six-month charts indicate an RSI of 47.55 and CCI of -32.7425, both of which are not terribly bad positions to enter the stock. It is also important to note that CrowdStrike does currently trade roughly 22 points off its highs.
Overall, CrowdStrike is an excellent company with a solid growth outlook and maintains plenty of market space to grow into.
In short, I like CrowdStrike short-term and long-term here, given that the business itself should maintain strength with or without the pandemic. Although, expect extreme volatility and possibly lower prices short term coming out of the pandemic due to the growth to value rotation.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply opinion based on independent research.