S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
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Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature

Earnings propel Crowdstrike, cybersecurity sector, to new highs

Crowdstrike stock price

Key Points

  • Crowdstrike's Q3 earnings report surpassed expectations, triggering a gap-up to new highs.
  • Analysts forecast Crowdstrike's fiscal 2024 earnings to increase by 91%.
  • Other industry leaders include Zscaler and Palo Alto Networks, as cybersecurity spending is expected to grow. 
  • 5 stocks we like better than CrowdStrike

Heading into its third-quarter earnings report, cybersecurity specialist Crowdstrike Holdings Inc. NASDAQ: CRWD was already on a roll, more than doubling in price between January 1 and November 27. 

The stock gapped up 10.40% on November 28 after reporting earnings and revenue that topped analysts’ estimates. You can see the results on MarketBeat’s Crowdstrike earnings page. 

Net income in the third quarter increased to 82 cents per share, up 105% from a year ago.

Revenue, including organic growth and acquisitions, increased by 35% to $786 million. 

Wall Street was eyeing earnings of 74 cents per share on $777 million in revenue. 

Wall Street cheers Crowdstrike's recurring revenue

Crowdstrike, which bills on a subscription basis, reported net new annual recurring revenue of $221.7 million, a 48% year-over-year increase. That’s a key metric for analysts and investors, as it indicates stable cash flows.

Consistent monthly income makes it easier for a company, and its investors, to predict the inflows for operating the business and launching new projects. 

Increasing recurring revenue also indicates a growing customer base and sustained demand, signaling the potential for longer-term profitability.

In the current quarter, the company is forecasting revenue in a range between $836 million and $840 million in revenue, with earnings of 81 cents to 82 cents a share. 

It was that forecast that sent the stock scurrying higher, as the FactSet consensus had called for for $837 million in revenue and 78 cents per share in net income. The midpoint of Crowdstrike’s own estimate is higher than Wall Street’s previous estimate. 

Partnering with Dell's enterprise sales channel

Among highlights in the quarter, Crowdstrike announced a strategic alliance with Dell Technologies Inc. NYSE: DELL to help organizations prevent, detect and respond to cyber threats. Crowdstrike’s Falcon platform, a cloud-based malware attack prevention technology, will be enabled with the purchase of any Dell PC sold through enterprise channels. 


The Crowdstrike chart shows the stock is extended beyond recent buy opportunities when it tagged moving average lines and rebounded to fresh gains. The stock was trading near its 10-day average as recently as November 28, before shooting higher after the earnings report. 

Cybersecurity spending is expected to continue rising. Tech research firm Gartner forecasts that total global security and risk management spending will increase by 14% in 2024, while cloud security specifically is seen growing by 24.7%.

As you might imagine, the cybersecurity industry always needs to stay several steps ahead of potential threats. In light of that need, CrowdStrike is building an even more robust and wide-ranging threat-detection system called XDR, for extended detection and response.

Significant EPS increase expected 

Analysts expect the company to earn $2.95 per share in the current year, which is fiscal 2024. That would be an increase of 91%, which is certain to catch investors’ attention.

Next year, Wall Street expects a gain of 25% to $3.69 per share. 

Crowdstrike’s report also gave investors more reason to cheer the cybersecurity segment of technology stocks. As a group, this subindustry is up 3.36% for the week and up 16.80% for November. 

Industry leaders also include Zscaler Inc. NASDAQ: ZS, which reported quarterly results the day before Crowdstrike, also gapping up on a better-than-expected report. 

Zscaler stock posted a November gain of 24%, and like Crowdstrike, is currently extended from a buy range.

Rival Palo Alto Networks also industry leader

Another cybersecurity leader is S&P 500 component Palo Alto Networks Inc. NASDAQ: PANW, which rose in tandem with Zscaler and Crowdstrike’s news. 

Palo Alto Networks’ Cortex XDR platform, Cortex, competes with Crowdstrike’s Falcon. 

It’s a good sign when you see several stocks from a broad industry increasing at the same time. This kind of simultaneous growth suggests broader economic health, and is generally a less risky proposition than a one-off stock that’s performing well, while the broad industry lags. 

Crowdstrike analyst forecasts show a consensus rating of “moderate buy,” with numerous analysts boosting their price targets following the earnings report.

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in CrowdStrike right now?

Before you consider CrowdStrike, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and CrowdStrike wasn't on the list.

While CrowdStrike currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
CrowdStrike (CRWD)
4.3497 of 5 stars
$314.60-2.9%N/A-5,242.46Moderate Buy$264.24
Dell Technologies (DELL)
4.261 of 5 stars
$124.59+31.6%1.19%28.51Moderate Buy$100.19
Palo Alto Networks (PANW)
4.671 of 5 stars
$302.40-2.6%N/A47.25Moderate Buy$313.89
Zscaler (ZS)
3.9451 of 5 stars
$219.23-9.4%N/A-230.77Moderate Buy$224.03
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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