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Is CrowdStrike (CRWD) Worth Buying Amid Market Uncertainties?
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Adding CrowdStrike Holdings, Inc. (CRWD - Free Report) to your portfolio seems a wise idea amid the current macroeconomic and geopolitical uncertainties, given the strength of its fundamentals and solid prospects.
The U.S. equity market have been witnessing severe volatility since the beginning of 2022 on increasing crude oil prices and rising inflation concerns. The ongoing Russia-Ukraine war has further increased worries for investors about global economic recovery.
The aforementioned factors have led to massive sell-off in the stock market with the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 plunging 8.7%, 16.1% and 10.6%, respectively, on a year-to-date basis.
Nonetheless, this sell-off has also created buying opportunities for investors. In the current scenario, investors can look for stocks with strong fundamentals that can stay afloat and grow once the impact of the aforementioned global macroeconomic and geopolitical uncertainties cools off.
Endpoint security solution provider, CrowdStrike is one such stock in our opinion.
Why is it an Attractive Pick?
Trading Way Below 52-Week High: CrowdStrike stock currently trades way below its 52-week high, which reflects its potential to go upward. The stock’s closing price of $191.02 on Mar 10 is 36% lower than the 52-week high of $298.48 attained on Nov 10, 2021.
One-Year Price Performance
Image Source: Zacks Investment Research
Attractive Valuation: CrowdStrike currently trades at an attractive valuation multiple. The stock trades at a one-year forward P/S of 18.6X compared with its five-year average of 39.56X.
Solid Rank & Growth Score: CrowdStrike currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Positive Earnings Surprise History: CrowdStrike has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 52.2%.
Solid Growth Prospects: The Zacks Consensus Estimate of 93 cents for fiscal 2023 earnings suggests growth of 38.8% from the year-ago reported figure. Moreover, earnings are expected to register 55% growth in fiscal 2024 and reach $1.44 per share. Its projected long-term earnings per share growth rate is 25%.
Robust Fundamental Growth Drivers: CrowdStrike is a global leader in next-generation endpoint protection, threat intelligence and cyberattack response services.
CrowdStrike is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches and the increasing necessity for security and networking products amid the COVID-19 pandemic-led remote working trend. Moreover, the ongoing conflict in Ukraine and sanctions imposed on Russia may result in an increase in cyberattacks as Kremlin might use it as a tool to put pressure on western countries to ease sanctions.
Additionally, continued digital transformation and cloud migration strategies adopted by organizations are key growth drivers. CrowdStrike’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users.
Moreover, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth for the company.
Earlier this week, CrowdStrike delivered better-than-expected results for fourth-quarter fiscal 2022. Quarterly revenues and non-GAAP earnings soared 63% and 131%, respectively, on a year-over-year basis.
The company added 1,638 net new subscription customers during the reported quarter. It had a total of 16,325 subscription customers as of Jan 31, 2022, reflecting year-over-year growth of 65%.
Considering CrowdStrike’s growth prospects, it makes sense to invest for long-term gains.
Other Stocks to Consider
Some other stocks from the broader technology sector worth considering amid the current market environment are Advanced Micro Devices (AMD - Free Report) , ON Semiconductor (ON - Free Report) and Micron Technology (MU - Free Report) .
Advanced Micro Devices currently sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for first-quarter 2022 earnings has been revised upward by 33.8% to 91 cents per share over the past 60 days. For 2022, earnings estimates have moved upward by 71 cents to $3.99 per share over the past 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 17%. Shares of AMD have declined 26% in the year-to-date period.
ON Semiconductor sports a Zacks Rank #1 and has a Growth Score of A at present. The Zacks Consensus Estimate for ON’s first-quarter 2022 earnings has been revised upward to $1.04 per share from $1.00 30 days ago. For 2022, earnings estimates have been revised upward by 7.2% to $4.16 per share in the past 30 days.
ON Semiconductor’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 16.3%. Shares of ON are down 15.1% YTD.
Micron currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for second-quarter fiscal 2022 earnings has remained unchanged over the past 30 days at $1.95 per share. For fiscal 2022, earnings estimates have moved upward by 4 cents to $8.95 per share in the past 30 days.
Micron’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 5%. MU stock has lost 18.7% of its market value in the year so far.
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Is CrowdStrike (CRWD) Worth Buying Amid Market Uncertainties?
Adding CrowdStrike Holdings, Inc. (CRWD - Free Report) to your portfolio seems a wise idea amid the current macroeconomic and geopolitical uncertainties, given the strength of its fundamentals and solid prospects.
The U.S. equity market have been witnessing severe volatility since the beginning of 2022 on increasing crude oil prices and rising inflation concerns. The ongoing Russia-Ukraine war has further increased worries for investors about global economic recovery.
The aforementioned factors have led to massive sell-off in the stock market with the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 plunging 8.7%, 16.1% and 10.6%, respectively, on a year-to-date basis.
Nonetheless, this sell-off has also created buying opportunities for investors. In the current scenario, investors can look for stocks with strong fundamentals that can stay afloat and grow once the impact of the aforementioned global macroeconomic and geopolitical uncertainties cools off.
Endpoint security solution provider, CrowdStrike is one such stock in our opinion.
Why is it an Attractive Pick?
Trading Way Below 52-Week High: CrowdStrike stock currently trades way below its 52-week high, which reflects its potential to go upward. The stock’s closing price of $191.02 on Mar 10 is 36% lower than the 52-week high of $298.48 attained on Nov 10, 2021.
One-Year Price Performance
Image Source: Zacks Investment Research
Attractive Valuation: CrowdStrike currently trades at an attractive valuation multiple. The stock trades at a one-year forward P/S of 18.6X compared with its five-year average of 39.56X.
Solid Rank & Growth Score: CrowdStrike currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Positive Earnings Surprise History: CrowdStrike has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 52.2%.
Solid Growth Prospects: The Zacks Consensus Estimate of 93 cents for fiscal 2023 earnings suggests growth of 38.8% from the year-ago reported figure. Moreover, earnings are expected to register 55% growth in fiscal 2024 and reach $1.44 per share. Its projected long-term earnings per share growth rate is 25%.
Robust Fundamental Growth Drivers: CrowdStrike is a global leader in next-generation endpoint protection, threat intelligence and cyberattack response services.
CrowdStrike is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches and the increasing necessity for security and networking products amid the COVID-19 pandemic-led remote working trend. Moreover, the ongoing conflict in Ukraine and sanctions imposed on Russia may result in an increase in cyberattacks as Kremlin might use it as a tool to put pressure on western countries to ease sanctions.
Additionally, continued digital transformation and cloud migration strategies adopted by organizations are key growth drivers. CrowdStrike’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users.
Moreover, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth for the company.
Earlier this week, CrowdStrike delivered better-than-expected results for fourth-quarter fiscal 2022. Quarterly revenues and non-GAAP earnings soared 63% and 131%, respectively, on a year-over-year basis.
The company added 1,638 net new subscription customers during the reported quarter. It had a total of 16,325 subscription customers as of Jan 31, 2022, reflecting year-over-year growth of 65%.
Considering CrowdStrike’s growth prospects, it makes sense to invest for long-term gains.
Other Stocks to Consider
Some other stocks from the broader technology sector worth considering amid the current market environment are Advanced Micro Devices (AMD - Free Report) , ON Semiconductor (ON - Free Report) and Micron Technology (MU - Free Report) .
Advanced Micro Devices currently sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for first-quarter 2022 earnings has been revised upward by 33.8% to 91 cents per share over the past 60 days. For 2022, earnings estimates have moved upward by 71 cents to $3.99 per share over the past 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 17%. Shares of AMD have declined 26% in the year-to-date period.
ON Semiconductor sports a Zacks Rank #1 and has a Growth Score of A at present. The Zacks Consensus Estimate for ON’s first-quarter 2022 earnings has been revised upward to $1.04 per share from $1.00 30 days ago. For 2022, earnings estimates have been revised upward by 7.2% to $4.16 per share in the past 30 days.
ON Semiconductor’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 16.3%. Shares of ON are down 15.1% YTD.
Micron currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for second-quarter fiscal 2022 earnings has remained unchanged over the past 30 days at $1.95 per share. For fiscal 2022, earnings estimates have moved upward by 4 cents to $8.95 per share in the past 30 days.
Micron’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 5%. MU stock has lost 18.7% of its market value in the year so far.