Shares of cybersecurity company CrowdStrike Holdings CRWD recovered slightly from the large stock drop that happened after a company update sparked a global outage for several industries and companies such as Microsoft.
With its second-quarter earnings on deck, the stock could remain highly volatile in its recovery mode.
What Happened: CrowdStrike is hitting out at competition that could be looking to win customers away after the company's global outage, which is likely to be a key topic when the company reports second-quarter financial results.
Analysts expect the company to report second-quarter revenue of $958.70 million, compared to revenue of $731.6 million in last year's second quarter, according to data from Benzinga Pro.
Earnings per share are expected to come in at 98 cents per share versus 74 cents per share reported in last year's second quarter.
CrowdStrike has beaten both revenue and earnings per share estimates from analysts in more than 10 straight quarters, putting its streak on the line Wednesday, Aug. 28 when it reports after market close.
Previous guidance from the company calls for revenue between $958.3 million and $961.2 million and earnings in a range of 98 cents to 99 cents per share.
While second-quarter results could be minimally impacted by the global outage on July 19, the real key will be guidance and commentary on what happens next.
CrowdStrike previously raised full-year guidance for revenue and earnings per share. Those figures could be in question with the potential loss of revenue from customers leaving and the potential money set aside for lawsuits and settlements as legal challenges mount.
The company is likely to share how it has fixed the issue, progressed and moved on, and what it's doing to win back customer support and accounts. Shares could move based on the commentary and guidance being lowered or raised, or the company simply reiterating the already heightened figures.
Why It's Important: A quick look at the CrowdStrike year-to-date chart from Benzinga Pro shows shares are actually up 4.8% in 2024.
Shares fell from a close of $343.05 on July 18 to open at $294.51 on July 19 and trade between $290.10 to $316.75 on the day of the global outage.
CrowdStrike shares have fallen since and were also hit on Aug. 5 when the stock market saw significant drops for companies, with the technology sector hit hard.
Over the past month, shares of CrowdStrike are down 1.4%, nearly recovering from the Aug. 5 losses and continued drop.
A positive earnings report and/or a positive update on guidance could kickstart a rally in shares and get closer to the $294.51 opening price on July 19, as well as closer to the $343.05 level last seen before the outage.
CRWD Price Action: CrowdStrike shares closed Thursday at $267.64 versus a 52-week trading range of $141.97 to $398.33.
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