Shares of CrowdStrike Holdings Inc CRWD closed at $364.3 apiece on Tuesday and fell by more than 5% in premarket trading on Wednesday.
Technical analysis pointed towards a bullish trend after the Texas-based cybersecurity technology company reported its third-quarter earnings.
What Happened: Despite the fallout from a faulty software update in July, the company reported its highest-ever revenue in the third quarter, surpassing the $1 billion mark, beating the consensus estimate of $982.36 million, curated by Benzinga.
Technical Analysis: From a technical perspective, the analysis of daily moving averages shows support for the CrowdStrike stock.
Despite falling over 5% in premarket trading on Wednesday, at $344 a piece, CrowdStrike’s stock is above its 20, 50, and 200-day simple moving averages, suggesting a largely bullish trend.
On the other hand, investors can also benefit from some potential selling opportunities – the relative strength index of 68.19 suggests CrowdStrike stock is near the “overbought” territory.
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Why It Matters: Even though the third-quarter non-GAAP earnings beat estimates, according to the GAAP measures in the company’s press release, it reported a net loss of $16.8 million, as compared to an income of $26.7 million in the third quarter of the previous fiscal.
Additionally, the third-quarter GAAP loss from operations was reported at $55.7 million, compared to income of $3.2 million in the third quarter of fiscal 2024.
The July disruption resulted in flight cancellations globally and impacted sectors such as banking, healthcare, and hospitality. Delta Air Lines Inc. DAL sued the company last month, estimating that the outage cost it $500 million.
To this, the chief financial officer Burt W. Podbere, said, “We expect Q4 free cash flow to reflect a significantly more pronounced July 19 impact in comparison to Q3.”
Analyst Views: According to Benzinga Pro data, CrowdStrike has a consensus price target of $338.11 apiece based on the ratings of 42 analysts.
The high is $440 per share issued by Keybanc on July 2 and the low is $265 apiece issued by Scotiabank on Aug. 14.
The average price target of $393.33 between Evercore ISI Group, Rosenblatt, and Keybanc, implies a 14.67% upside for CrowdStrike.
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