CrowdStrike Holdings Inc. shares rocketed to record highs Friday, having traded for less than a month as the cloud-based cybersecurity company wowwed analysts with an outlook that forecast strong growth.
CrowdStrike CRWD, +14.80% shares rallied 13% to $82.55 in recent activity, after touching an all-time high of $85.85, less than a month after the company’s initial public offering, when shares nearly doubled in their first day of trading after an initial pricing of $34. In comparison, the S&P 500 index SPX, -0.62% declined 0.4% Friday, the tech-heavy Nasdaq Composite Index COMP, -0.74% slipped 0.6%, and the ETFMG Prime Cyber Security ETF HACK, -0.55% declined 0.3%.
Shares rallied after the company forecast earnings well above the Wall Street consensus late Thursday. While analysts had originally estimated a loss of $1.02 a share on revenue of $412.3 million for the year, CrowdStrike forecast a loss of 72 cents to 70 cents on revenue of $430.2 million to $436.4 million. Now, analysts expect a consensus loss of 75 cents a share on revenue of $436.7 million.
Jefferies analyst John DiFucci said he was not raising his hold rating on the stock only because of its high price and increased his target price to $80 from $71.
DiFucci noted “the annual guidance was significantly above consensus—over $20 million in revenue, or nine percentage points of growth, and about $35 million in non-GAAP operating profit—which we believe reflects a very robust pipeline, strong customer adoption rates, and a clear path to strong profitability.”
Macquarie Research analyst Sarah Hindlian, who has an outperform rating, placed CrowdStrike in good company among other cloud-based pioneers.
“CrowdStrike is in the early days of building a cloud security platform much like Salesforce CRM, -0.76% has done in CRM, Workday WDAY, -1.67% in HR and ServiceNow NOW, -1.65% in Services, with a foundational element in a specific approach to endpoint security,” Hindlian said.
Other glowing comparisons came from Needham analyst Alex Henderson, who has a buy rating and raised his price target to $92 from $80.
“The company is one of the prime names in Cloud based security and key to improving either legacy perimeter defense or in shifting to a Cloud Direct Zero Trust approach along with ZScaler ZS, +0.36% and Okta OKTA, -1.78% ” Henderson said.
The rate at which CrowdStrike is growing its subscriber base is very telling, said Mizuho analyst Gregg Moskowitz, who has a buy rating and raised his price target to $90 from $80.
“We believe it’s also important to note that CRWD, which was founded in 2011, has now added more than 1,800 of its roughly 3,000 customers over just the last 5 quarters,” Moskowitz said. “In our view, this supports our checks that clearly indicate that CRWD has separated from the pack over the last 12 months or so.”
Oppenheimer analyst Shaul Eyal, who has an outperform rating and raised his price target to $100 from $90, said CrowdStrike is giving traditional security vendors and peers a run in the $30 billion total addressable security market.
“With FY20E revenue estimated to grow >70% y/y, we believe CRWD is well positioned to further disrupt traditional and next-gen antivirus vendors and move towards new adjacencies,” Eyal said.
Of the 16 analysts who cover CrowdStrike so far, 11 have buy ratings and five have hold ratings, and an average target price of $88.06 up from a previous $77.56, according to FactSet data.
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