Cybersecurity company CrowdStrike (NASDAQ:CRWD) will be announcing earnings results tomorrow afternoon. Here's what you need to know.
Last quarter CrowdStrike reported revenues of $731.6 million, up 36.7% year on year, in line with analyst expectations. It was a decent quarter for the company, with revenue and non-GAAP operating profit exceeding expectations. Guidance for the next quarter was in line for revenue but above for non-GAAP operating profit. Full year guidance was raised. Some minor negatives included ARR (annual recurring revenue, a leading indicator of revenue) that was just in line.
Is CrowdStrike buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting CrowdStrike's revenue to grow 33.8% year on year to $777.4 million, slowing down from the 52.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.74 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 3%.
Looking at CrowdStrike's peers in the cybersecurity segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Varonis's revenues decreased 0.8% year on year, missing analyst estimates by 2.5% and Qualys reported revenues up 13.1% year on year, exceeding estimates by 0.7%. Varonis traded down 4.1% on the results, Qualys was flat on the results.
There has been positive sentiment among investors in the cybersecurity segment, with the stocks up on average 12% over the last month. CrowdStrike is up 20.5% during the same time, and is heading into the earnings with analyst price target of $203.5, compared to share price of $210.4.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
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The author has no position in any of the stocks mentioned.