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CrowdStrike (VRWD) to Report Q3 Earnings: What's in Store?

Zacks Equity Research
·4 min read

CrowdStrike Holdings CRWD is slated to release third-quarter fiscal 2021 results on Dec 2.

For the fiscal third quarter, the company estimates revenues in the $210.6-$215 million band. The Zacks Consensus Estimate for quarterly revenues is pegged at $213.7 million, indicating a 70.8% year-over-year surge.

For the bottom line, management expects to report between loss per share of a penny and a break-even. The Zacks Consensus Estimate for the same stands at break-even compared with the loss of 7 cents per share posted in the year-ago period.

CrowdStrike Holdings Inc. Price and Consensus

CrowdStrike Holdings Inc. Price and Consensus
CrowdStrike Holdings Inc. Price and Consensus

CrowdStrike Holdings Inc. price-consensus-chart | CrowdStrike Holdings Inc. Quote

In the last reported quarter, the company had recorded adjusted earnings of 3 cents per share as against the loss of 18 cents per share posted in the year-ago quarter. Further, revenues soared 89% year on year to $184.3 million.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 162.5%.

Let’s see how things have shaped up for this announcement.

Factors at Play

CrowdStrike’s quarterly results are anticipated to reflect benefits from continued solid demand for its products, given the healthy environment of the global security market.

Also, a huge global workforce is working remotely, in an effort to contain the spread of coronavirus. However, an increasing number of people logging into employers' networks is triggering a greater need for security. This trend might have had spurred demand for CrowdStrike’s products during the fiscal third quarter.

Furthermore, CrowdStrike’s quarterly results are likely to reflect stellar growth in subscription revenues. Increasing number of net new subscription customers might have been a key tailwind as well.

The company is anticipated to have gained from the growing strength in subscription customers, who are frequently adopting four or more cloud modules. CrowdStrike’s cloud-native Falcon platform is a major driver.

In addition, investment in the collaboration with Amazon's AMZN AWS is an upside. The company is benefiting from its product availability on the AWS platform. Expansion in volume of transactions through the AWS Marketplace, growth in the co-selling opportunities with AWS salesforce, and the uptake of AWS service integrations are likely to have boosted the company’s earnings performance during the period in discussion.

What Our Model Says

Our proven model does not predict an earnings beat for CrowdStrike this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

CrowdStrike currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Toronto Dominion Bank TD has an Earnings ESP of +3.63% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Kroger Co. KR has an Earnings ESP of +0.38% and carries a Zacks Rank of 2, currently.

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