CrowdStrike stock slides 10% premarket despite upbeat outlook, strong results
Thapana Onphalai
CrowdStrike (NASDAQ:CRWD) stock slid 10.3% before the bell on Thursday despite the cybersecurity firm's raised FY guidance and Q1 results beat, with many attributing the decline to the shares' premium valuation.
The company expects FY24 adjusted EPS of $2.32-$2.43 vs. $2.31 consensus and revenue of ~$3B-$3.04B vs. $3B consensus. Prior outlook was $2.21-$2.39 adjusted EPS and ~$2.96B-$3.01B revenue.
"Our momentum with large customers, record Q2 pipeline, and success tracking deals to close, gives us confidence in the back half of the year," said CEO George Kurtz in an earnings call.
CrowdStrike (CRWD) projected Q2 adjusted EPS of $0.54-$0.57 vs. $0.54 consensus and revenue of $717.2M-$727.4M vs. $718.6M consensus.
Q1 adjusted EPS was $0.57 vs. $0.31 in Q1 2023, while revenue rose 42% Y/Y to $692.58M. ARR increased 42% Y/Y to $2.73B as of April 30, of which $174.2M was net new ARR added in Q1.
"The demand environment remained resilient, although we continued to see increased deal scrutiny and longer than typical sales cycles," said CFO Burt Podbere.
He said Q2 is generally the lowest cash flow generation quarter, given timing of expenses and billing seasonality. "This year, we expect to see more pronounced seasonality."
"The double-digit pullback in CRWD is a result of the stock running too far too fast and has nothing to do with business fundamentals," said Ahan Vashi, Investing Group leader of 'The Quantamental Investor'.
Shares of CrowdStrike (CRWD) climbed 55% YTD and 33% in May alone.
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