CrowdStrike Soars Most in Four Years After Strong Results

Jake Bleiberg

March 6, 2024 at 10:57 PM·2 min read

In this article:

Oops!
Something went wrong.
Please try again later.
Oops!
Something went wrong.
Please try again later.

(Bloomberg) -- CrowdStrike Holdings Inc. surged the most in four years — hitting a record high — after the cybersecurity company reported fourth-quarter results that were better than expected and gave an optimistic outlook for the current period.

Most Read from Bloomberg

The company is anticipating earnings per share of 89 cents to 90 cents in the three months ending in March, beating the average analyst forecasts for 82 cents. It sees revenue of $902.2 million to $905.8 million, also surpassing estimates.

The Austin, Texas-based company’s strong report comes at a time of extreme volatility for cybersecurity stocks. High-profile cybersecurity attacks have created new demand opportunities for some security firms while others have largely missed out. In stark contrast to CrowdStrike, Palo Alto Networks Inc. plunged in February after cutting its revenue forecast for the year, saying customers were facing cybersecurity “spending fatigue.”

CrowdStrike is setting itself apart as it capitalizes on a single-platform strategy that has allowed it to gain market share. Morgan Stanley analyst Hamza Fodderwala noted that CrowdStrike is “one of the few software companies growing about 30% this year.” He said there is “no spending fatigue here,” and that CrowdStrike has “multiple tailwinds including rising cyberattacks, new SEC regulations and AI driving increased demand.”

CrowdStrike shares jumped much as 23% to $365 on Wednesday morning in New York, the biggest intraday gain since March 2020. Several analysts raised their price targets on the stock.

In the fourth quarter, CrowdStrike reported adjusted earnings of 95 cents a share, beating estimates of 83 cents. Quarterly revenue also exceeded estimates, hitting $845.3 million.

Chief Executive Officer George Kurtz credited the “exceptionally strong” results to the company’s strategy of offering its security products on a single platform. Unlike rival Palo Alto, he said, CrowdStrike’s products are “one agent and one integrated workflow.” Kurtz noted on a call with investors that an unnamed financial services firm had replaced its Palo Alto cloud products “in a large seven-figure deal.”

As cyberattacks have become more sophisticated as a result of artificial intelligence, companies are increasingly looking to consolidate their security platforms and operate more efficiently. New rules by the US Securities and Exchange Commission also require companies to quickly disclose malicious cyberattacks on their networks and detail the processes in place to prevent them from happening again.

CrowdStrike also announced that it had agreed to buy Flow Security, a firm that runs a cloud-data protection platform.

--With assistance from Ryan Vlastelica and Subrat Patnaik.