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CrowdStrike Q3 Preview: Double-Digit Earnings Growth Inbound?

The Zacks Computer and Technology sector has tumbled in 2022 amid a hawkish pivot from the Federal Reserve, down more than 30% and widely lagging behind the general market.

A company residing in the realm that many are familiar with, CrowdStrike CRWD, is on deck to unveil quarterly earnings on November 29th, after the market close.

CrowdStrike is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services.

Currently, the company carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of a C.

How does everything else stack up? Let’s take a closer look.

Share Performance & Valuation

CRWD shares have been no exception to the Technology sector’s weakness in 2022, down more than 30% and lagging behind the S&P 500 by a notable margin.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Over the last month, the story has remained the same; CRWD shares have underperformed relative to the S&P 500, down roughly 14%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Few buyers have been found within technology stocks in 2022, with the Fed’s hawkish nature spoiling the fun.

The company’s forward price-to-sales ratio comes in at 14.2X, undoubtedly on the higher end of the spectrum. Still, it’s worth noting that the value is a fraction of its 29.7X median since its IPO in 2019, making shares relatively cheap.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Estimates

Analysts have been silent for the quarter to be reported over the last several months, with zero earnings estimate revisions hitting the tape. Still, the Zacks Consensus EPS Estimate of $0.32 suggests an improvement of more than 85% Y/Y.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

CRWD’s top-line is in solid standing also; the Zacks Consensus Sales Estimate of $574.6 million indicates a Y/Y uptick of more than 50%.

Quarterly Performance

CRWD has a very impressive earnings track record, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in seven consecutive quarters. Just in its latest release, the company penciled in a 28.6% EPS beat.

Revenue results have also been strong; CrowdStrike has exceeded sales expectations in each quarter since its IPO in 2019. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Putting Everything Together

CRWD shares have slipped alongside most technology stocks in 2022, underperforming the general market across several timeframes.

The company’s forward price-to-sales ratio is undoubtedly expensive, but on a relative basis, the value is nowhere near historical levels.

Analysts haven’t made any earnings estimate revisions over the last several months, with estimates indicating sizable Y/Y upticks in both earnings and revenue.

Further, the company has a rock-solid earnings track record, regularly beating EPS estimates by significant percentages.

Heading into the release, CrowdStrike CRWD carries a Zacks Rank #3 (Hold) paired with an Earnings ESP Score of -2.1%.

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Zacks Investment Research