CrowdStrike Shares Fall 6% Despite Beating Q3 Estimates: What's Going On?

Shares of CrowdStrike Holdings Inc. CRWD dropped by 6.14% in pre-market trading on Wednesday, according to Benzinga Pro. This decline followed a weaker-than-anticipated earnings forecast for the upcoming quarter, despite the company surpassing Wall Street estimates for the third quarter.

What Happened: CrowdStrike projected adjusted earnings of $0.84 to $0.86 per share for the fiscal fourth quarter, missing Wall Street’s expectation of $$0.86 cents per share. Despite this, the cybersecurity firm reported record revenue of $1.01 billion in the third quarter, exceeding the consensus estimate of $982.36 million. Adjusted earnings stood at $0.93 per share, surpassing analyst predictions of $0.81 per share.

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The company’s recent performance follows a problematic software update in July that caused global computer crashes. Investors have been closely monitoring CrowdStrike for signs of recovery since the incident. While the third-quarter results were strong, the cautious outlook for the upcoming quarter has tempered investor enthusiasm.

Meanwhile, post the earnings, Needham & Company upgraded the price target from $360 to $420 while HSBC has downgraded to $347, as per Benzinga Pro data.

Why It Matters: The recent earnings report highlights CrowdStrike’s ability to recover from the July software update fallout, which had significant global repercussions. The company has consistently exceeded analyst estimates since its public debut in 2019, showcasing resilience and strong customer retention.

Despite the technical challenges earlier in the year, CrowdStrike has demonstrated a bullish trend. Despite falling 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.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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