CRWD Stock Plunges On Weak Forecast As Key Metric Misses Views

CrowdStrike Holdings (CRWD) late Tuesday reported October-quarter profit and revenue that topped estimates. But the CrowdStrike earnings outlook came in well below Wall Street targets and CRWD stock plummeted.

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CrowdStrike stock plunged 17.4% to near 114 in extended trading on the stock market today.

For the third quarter, CrowdStrike earnings were 40 cents a share, up 135% from a year earlier, on an adjusted basis. Including acquisitions, revenue jumped 53% to $581 million, edging by estimates.

Analysts polled by FactSet had projected CrowdStrike earnings of 32 cents on revenue of $575 million for the period ended Oct. 31.

A year earlier, the Sunnyvale, Calif.-based cybersecurity firm earned 17 cents a share on revenue of $380 million.

CRWD Stock: Key Financial Metric Misses

Wall Street also focuses on annual recurring revenue, or ARR. It’s a financial metric tied to subscription customer growth.

During the third quarter, ARR increased 54% to $2.34 billion. That missed estimates for ARR of $2.36 billion.

For the current quarter ending in January, CrowdStrike forecast revenue of $623.5 million, missing estimates of $634 million.

“CrowdStrike delivered a mixed quarter as ARR came in slightly below expectations and a smaller revenue beat,” RBC Capital analyst Matthew Hedberg said in a note to clients. “Management noted the macroeconomic impact to ARR seeing elongated sales cycles with smaller customers and some larger customers pursuing multi-phased subscription start dates, which delays ARR recognition to future quarters.”

Heading into the CrowdStrike earnings report, CRWD stock had retreated 30% thus far in 2022 amid the bear market in technology companies. CRWD stock owned a Relative Strength Rating of only 23 out of a best-possible 99, according to IBD Stock Checkup.

Cybersecurity Stocks To Watch

The cybersecurity company uses machine learning, one form of artificial intelligence, in its products. It also uses a specialized database to detect malware on laptops, mobile phones and other devices that access corporate networks.

Also, CrowdStrike is building a broad, threat-detection cybersecurity platform. Called XDR, or extended detection and response, it monitors endpoints as well as web/email gateways, web application firewalls and cloud business workloads.

CrowdStrike is one of many cybersecurity stocks to watch.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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