Crowdstrike Holdings Exceeds Expectations with Record Q3 Performance

JP Morgan's Brian Essex raised their price target on Crowdstrike Holdings (NASDAQ: CRWD) by 17% from $230 to $269 on 2023/12/11. The analyst maintained their Strong Buy rating on the stock.

According to the analyst, the decision to increase the price target was based on a thorough analysis of Crowdstrike's Security Software portfolio, taking into consideration the current and future market environments. Essex highlighted the recent stock multiples expansion as a positive sign, indicating a shift towards a risk-on sentiment in the market.

Looking at Crowdstrike Holdings' performance in Q3 2024, the company reported impressive results. The earnings per share (EPS) of $0.82 exceeded the Zacks Consensus Estimate by 10.8% and showed a staggering 105% growth compared to the same quarter in the previous year. Additionally, the revenue of $786.01M beat the Zacks Consensus Estimate by 1.14% and demonstrated a solid 35% increase compared to Q3 2023. The company also reported operating income of $175.65M and net income of $199.2M.

In terms of guidance, Crowdstrike Holdings' management provided optimistic projections for Q4 2024 and the full year. For Q4 2024, the company expects EPS in the range of $0.81 to $0.82 and revenue between $836.6M to $840M. They anticipate operating income of $186.5M to $189M and net income of $199.6M to $202.1M. For the full fiscal year 2024, the company forecasts EPS of $2.95 to $2.96, revenue of $3.047B to $3.050B, operating income of $633.6M to $636.2M, and net income of $715.2M to $717.7M.

Crowdstrike Holdings' President, CEO, and co-founder, George Kurtz, expressed satisfaction with the company's Q3 performance, stating that they exceeded expectations and achieved new milestones. Kurtz highlighted the company's net new Annual Recurring Revenue (ARR) growth, which accelerated to a record $223M. He also noted that CrowdStrike became the fastest and only pure play cybersecurity software vendor in history to surpass $3B in ending ARR. Kurtz attributed this success to the company's single platform architecture and unique data advantage, which have helped unite security and I.T. teams in solving cybersecurity challenges.

CFO Burt Podbere emphasized their focus on operational excellence, which resulted in record operating margin, net income, and free cash flow. He also mentioned the company's ongoing investments in innovation to achieve their vision of reaching $10B in ARR over the next five to seven years.

In addition to the rating update on Crowdstrike Holdings, JP Morgan's Brian Essex made changes to other stocks in their portfolio. Essex raised the price target on Check Point Software Technologies Ltd by 11.1%, Fortinet Inc by 7.7%, Rapid7 Inc by 17.3%, Varonis Systems Inc by 36.1%, and Cyberark Software Ltd by 19.8%. Despite the price target adjustments, Essex maintained a Hold rating on Check Point Software Technologies Ltd, Fortinet Inc, Rapid7 Inc, and Varonis Systems Inc. However, they maintained a Strong Buy rating on Cyberark Software Ltd.

The majority of top-rated analysts, approximately 96%, currently rate Crowdstrike Holdings as a Strong Buy or Buy. Only 4% of analysts view it as a Hold, and no analysts recommend or strongly recommend selling the stock.

Since Crowdstrike Holdings' latest quarterly report on 2023/11/28, the stock price has seen significant growth. It is up 16.3% since the report, and year-over-year, the stock has experienced an impressive 108.3% increase. During this period, Crowdstrike Holdings has outperformed the S&P 500, which has seen a 15.8% increase.

JP Morgan analyst Brian Essex, who raised the price target on Crowdstrike Holdings, is ranked in the top 17% out of 4,426 Wall Street analysts by WallStreetZen. Essex specializes in the Consumer Cyclical, Industrials, and Technology sectors, with an average return of 5.2% and a win rate of 48.1%.

Crowdstrike Holdings, Inc. is a leading provider of cloud-delivered protection for endpoints, cloud workloads, identity, and data. The company offers various services, including threat intelligence, managed security services, IT operations management, threat hunting, Zero Trust identity protection, and log management. Crowdstrike primarily sells subscriptions to its Falcon platform and cloud modules through its direct sales team and network of channel partners. The company serves customers worldwide and was incorporated in 2011. Its headquarters are located in Austin, Texas.

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