The stock of CrowdStrike Holdings (CRWD) is down 6% after the cybersecurity firm reported mixed quarterly financial results.
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The Austin, Texas-based company announced earnings per share (EPS) of $0.73, which was ahead of Wall Street’s consensus forecast of $0.66. However, the company’s profit was down from $0.93 a year earlier. Revenue for the quarter totaled $1.10 billion, which was just shy of consensus expectations of $1.11 billion. Sales were up 20% from the previous year.
Looking ahead, CrowdStrike’s forward guidance also came up short. The company guided for revenue in the current second quarter of $1.15 billion at the midpoint of its range. That was below analyst expectations that called for $1.16 billion in sales. The company maintained its full-year revenue outlook, while Wall Street expected the company to raise its guidance for all of 2025.
CrowdStrike’s income statement. Source: Main Street Data
Tech Spending Slows
In its earnings release, CrowdStrike said that higher interest rates and stubborn inflation led its clients to pullback on technology spending, weighing on demand for its cybersecurity products. Still, CrowdStrike said there has never been a greater need for cybersecurity given rising threats and ransomware attacks.
CrowdStrike also faces growing competition from other cybersecurity firms such as Palo Alto Networks (PANW) and Fortinet (FTNT). In May of this year, CrowdStrike announced that it is laying off 5% of its workforce as it adjusts to slowing growth. CRWD stock has risen 43% this year.
Is CRWD Stock a Buy?
The stock of CrowdStrike Holdings has a consensus Strong Buy rating among 38 Wall Street analysts. That rating is based on 33 Buy, four Hold, and one Sell recommendations issued in the last three months. The average CRWD price target of $443.63 implies 9.23% downside risk from current levels. These ratings are likely to change after the company’s financial results.
