Cybersecurity firm CrowdStrike (CRWD) has reported better-than-expected second-quarter financial results but weak forward guidance, sending its stock down 7% in after-hours trading.
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CrowdStrike managed to beat Wall Street forecasts for both sales and profits. The company reported earnings per share (EPS) of $0.93, which topped Wall Street forecasts of $0.83. Revenue of $1.17 billion was only slightly ahead of consensus expectations. Sales in the quarter were up 21% from a year earlier.
Unfortunately, CrowdStrike’s guidance came in below Wall Street’s estimates, sending the stock sharply lower. Management guided for revenue of $1.21 billion in the current quarter, which was 1.3% below analyst estimates. Full-year earnings guidance is now set at $3.66 at the midpoint, a 4.6% increase from the company’s previous outlook.
CrowdStrike’s income statement. Source: Main Street Data
Other Highlights
Other highlights from CrowdStrike’s latest print included subscription revenue of $1.10 billion, which matched analyst estimates, and annual recurring revenue (ARR) of $4.66 billion, which was slightly ahead of estimates that called for $4.64 billion. A free cash flow margin of 24.3% was down from 25.3% in the previous quarter.
Along with its financial results, CrowdStrike announced plans to acquire Onum, a provider of real-time telemetry management. Terms of the deal were not disclosed. Prior to its post-earnings decline, CRWD stock had risen 24% this year.
Is CRWD Stock a Buy?
The stock of CrowdStrike has a consensus Moderate Buy rating among 40 Wall Street analysts. That rating is based on 26 Buy and 14 Hold recommendations issued in the last three months. The average CRWD price target of $495.06 implies 16.65% upside from current levels. These ratings could change after the company’s financial results.
