Should You Buy CrowdStrike After Q1 Revenue and EPS Growth Send Shares 9% Higher?

CrowdStrike (CRWD) is up 9% to start the week after delivering strong first-quarter earnings on the top and bottom lines. The stock is now up 154% in the past year and 51% through 2024 thus far.

The cybersecurity company reported a 33% growth in revenue to $921 million, easily surpassing the forecast it set previously of $902.2 million to $905.8 million. Much of this can be attributed to a 34% growth in subscription revenue specifically, which soared to $872.2 million.

Annual Recurring Revenue (ARR) is a measure of the annualized value of its subscription contracts – that figure climbed 33% as well to $3.65 billion. This was driven by new contracts in the quarter, as net new ARR climbed 22%.

On the profitability side of things, the company outperformed its previous EPS guidance of $0.89 to $0.90 with $0.93. This was a massive improvement year over year compared to just $0.57 this time last year.

After generating $383.2 million in operating cash flow, CrowdStrike ended the quarter with $3 billion in net cash and short-term investments.

A contributing factor for a successful first quarter was customers investing in more and more products from the company’s offerings, which it refers to as security modules. More than 65% of customers have five or more modules. 28% use more than 7 modules as protection.

Specific modules the company sees pushing it forward are its Falcon and Falcon X programs, which are driven by AI to integrate all 28 modules together for seamless operation. 

The company is expecting more improvement in the quarter and year ahead, too. The previous full-year outlook called for revenue between $3.92 billion and $3.99 billion and adjusted EPS of between $3.77 to $3.97. Now, that range has been lifted to $3.98 billion to $4.01 billion in revenue with EPS between $3.93 to $4.03.

The trajectory of CRWD has been impressive in both the short and long-term, but is there still room for you to buy this stock? We’ve taken a look through the VectorVest stock analysis software and found 3 things to consider if you’re contemplating this opportunity.

CRWD Has Poor Upside Potential, But Good Safety and Excellent Timing Earn the Stock a BUY

VectorVest is a proprietary stock rating system that simplifies your trading strategy by delivering clear, actionable insights in just 3 ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).

Each sits on a scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy. Better yet, you’re given a clear buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. Here’s what we are seeing for CRWD:

• Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. This is a far superior indicator than the typical comparison of price to value alone. CRWD has a poor RV rating of 0.84.
• Good Safety: The RS rating is a risk indicator. It’s calculated from a deep analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 1.22 is good for CRWD.
• Excellent Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. The RT rating of 1.40 is excellent for CRWD.

The overall VST rating of 1.20 is good, earning the stock a BUY recommendation. But before you make your next move, we encourage you to dig deeper and get the full scoop on this opportunity with a free stock analysis at VectorVest!

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Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. CRWD climbed 9% Monday morning, adding to its impressive performance in both the short and long term. This was driven by an impressive Q1 performance coupled with an upbeat outlook for the current quarter and the full year. The stock itself has poor upside potential, but good safety and excellent timing.

Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!