CrowdStrike Stock Is Getting Crushed: What's Going On?

CrowdStrike Holdings Inc CRWD shares are trading lower Wednesday, in sympathy with shares of cybersecurity peer Palo Alto Networks Inc PANW, which fell after the company issued weak guidance.

What Happened: Palo Alto beat analyst estimates on both the top and bottom line in its fiscal second quarter, but the company issued soft guidance, which appears to be the main reason shares are down more than 25% on Wednesday.

Palo Alto guided for fiscal third-quarter revenue of $1.95 billion to $1.98 billion versus estimates of $2.04 billion. The cybersecurity company also said it expects third-quarter adjusted earnings to be between $1.24 and $1.26 per share versus estimates of $1.29 per share. 

Palo Alto guided for full-year 2024 revenue between $7.95 billion and $8 billion versus estimates of $8.19 billion. The company said it sees full-year earnings between $5.45 and $5.55 per share versus estimates of $5.51 per share.

Weakness in Palo Alto shares has leaked into the rest of the cybersecurity sector, particularly in the names that have not yet reported quarterly earnings. CrowdStrike is due to report fourth-quarter financial results after the market close on March 5. Analysts currently expect the company to report earnings of 82 cents per share and revenue of $839.062 million, according to Benzinga Pro.

Check This Out: Palo Alto Networks Analysts Cut Their Forecasts After Q2 Results

Is CRWD A Good Stock To Buy?

Wall Street analysts view CrowdStrike on the whole as an Outperform, given the history of coverage over the past three months. Yi Fu Lee from Cantor Fitzgerald is the most optimistic, expecting a 50% rise in the stock in the coming year.

But looking at how the market as a whole thinks of the stock, you can reference historical price action for views on whether investors feel strongly about the stock one way or another. In the past three months, CrowdStrike rose 38.44%, which indicates that opinion improved on the business and how attractive it is to own based on either its stock price, or underlying fundamentals, like revenue, which rose 35.31% over the past year.

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CRWD Price Action: CrowdStrike shares were down 10.7% at $289.15 at the time of writing, according to Benzinga Pro.

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