Latest news with #CustomerCommitmentPackages
Business Insider
2 days ago
- Business
- Business Insider
CrowdStrike Stock Tumbles: Here's What Morgan Stanley Predicts Next
CrowdStrike (NASDAQ:CRWD) stock had surged more than 40% year-to-date heading into its first fiscal quarter report, with its elevated valuation setting a high bar for performance. However, the results fell short, and shares tumbled ~6% in Wednesday's trading session. Confident Investing Starts Here: Revenue climbed 19.4% year-over-year to $1.1 billion but still fell $10 million short of Wall Street's expectations. According to management, subscription revenue took an $11 million hit, largely due to hurdles tied to Customer Commitment Packages (CCP), driven by one-off customer incentives and special partner programs. These headwinds aren't going away just yet – management expects a continued drag of $10 to $15 million per quarter over the next three periods. On a brighter note, the bottom line came through: adjusted EPS landed at $0.73, outpacing the Street's forecast by $0.07. But the outlook also failed to please. For the current quarter, CrowdStrike sees revenue landing in the range between $1.145 billion and $1.152 billion, falling short of the $1.16 billion consensus estimate. According to Morgan Stanley's Keith Weiss, the biggest sticking point wasn't the miss on revenue or guidance, but rather the net new annual recurring revenue (NNARR). Despite an 11% beat versus consensus – even better than the average ~8% beat seen over the past year – the figure didn't quite meet the buy-side's elevated hopes, especially with the stock trading at a steep 50x EV/CY27 free cash flow. However, Weiss, who ranks among the top 2% of Street stock pros, believes that despite CrowdStrike being 'undeniably an expensive stock,' there's a compelling case for renewed 30%+ free cash flow growth. The company is gaining momentum as a 'leading consolidator' in the cybersecurity space, with nearly half its customers now using six or more modules and a strong uptake of Falcon Flex contracts, which have grown sixfold year-over-year. Demand remains solid, with generative AI expanding both the threat landscape and the need for advanced security tools – areas where CrowdStrike's Charlotte AI is seeing 'strong traction.' Finally, margins are trending higher, with Q1 operating margins beating expectations and management now guiding to over 30% FCF margins by fiscal 2027. All told, Weiss sees enough upside to bump his price target from $455 to $490. Still, with shares already running hot, that implies just a modest 5% upside from current levels. Weiss' rating stays an Overweight (i.e., Buy). (To watch Weiss's track record, click here) Elsewhere on the Street, the stock garners an additional 28 Buys, 8 Holds and 1 Sell, for a Moderate Buy consensus rating. However, the $471.06 average target implies the stock is currently fully valued. (See CrowdStrike stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
The Star
3 days ago
- Business
- The Star
CrowdStrike shares drop as Windows-outage fallout hits forecast
FILE PHOTO: CrowdStrike logo is seen in this illustration taken July 29, 2024. REUTERS/Dado Ruvic/Illustration/File Photo (Reuters) -CrowdStrike shares slumped 7% in premarket trading after the cybersecurity company forecast its second-quarter revenue below analysts' estimates, weighed down by its customer retention efforts following a Windows-related outage last year. Following the outage caused by faulty update to its "Falcon Sensor" software in July 2024, the company introduced incentive packages that included discounts and flexible payment terms to reassure and retain customers. CEO George Kurtz said in March that CrowdStrike wrapped up the Customer Commitment Packages (CCP) program at the end of fourth quarter. The program reduced revenue growth because subscriptions lasted longer due to extensions offered by the company. It also impacted new opportunities, as these incentives provided additional features at no extra cost. Finance chief Burt Podbere said CCP-related initiatives reduced revenue by about $11 million in the first quarter, with an expected continued impact of $10 million to $15 million per quarter for the remainder of the fiscal year. The Austin, Texas-based company reported loss per share of 44 cents in the quarter ended April 30, compared with a profit per share of 17 cents a year earlier. If premarket losses hold, CrowdStrike could lose more than $8 billion from its market value of $121.74 billion, despite its stock having surged around 43% this year. "We believe CRWD is taking share from other vendors across their product offerings," Truist Securities said. At least 18 brokerages raised their price target after the company's first quarter revenue came in-line with estimates, while adjusted profit per share exceeded the target. The results follow the company's announcement last month that it would layoff about 500 employees in a bid to streamline operations and work toward its goal of $10 billion in annual recurring revenue. CrowdStrike trades at 123.69 times the estimates of its earnings for the next 12 months, compared with 54.01 times for rival Palo Alto Networks and 81.56 times for Zscaler. (Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
Yahoo
3 days ago
- Business
- Yahoo
CrowdStrike shares drop as Windows-outage fallout hits forecast
(Reuters) -CrowdStrike shares slumped 7% in premarket trading after the cybersecurity company forecast its second-quarter revenue below analysts' estimates, weighed down by its customer retention efforts following a Windows-related outage last year. Following the outage caused by faulty update to its "Falcon Sensor" software in July 2024, the company introduced incentive packages that included discounts and flexible payment terms to reassure and retain customers. CEO George Kurtz said in March that CrowdStrike wrapped up the Customer Commitment Packages (CCP) program at the end of fourth quarter. The program reduced revenue growth because subscriptions lasted longer due to extensions offered by the company. It also impacted new opportunities, as these incentives provided additional features at no extra cost. Finance chief Burt Podbere said CCP-related initiatives reduced revenue by about $11 million in the first quarter, with an expected continued impact of $10 million to $15 million per quarter for the remainder of the fiscal year. The Austin, Texas-based company reported loss per share of 44 cents in the quarter ended April 30, compared with a profit per share of 17 cents a year earlier. If premarket losses hold, CrowdStrike could lose more than $8 billion from its market value of $121.74 billion, despite its stock having surged around 43% this year. "We believe CRWD is taking share from other vendors across their product offerings," Truist Securities said. At least 18 brokerages raised their price target after the company's first quarter revenue came in-line with estimates, while adjusted profit per share exceeded the target. The results follow the company's announcement last month that it would layoff about 500 employees in a bid to streamline operations and work toward its goal of $10 billion in annual recurring revenue. CrowdStrike trades at 123.69 times the estimates of its earnings for the next 12 months, compared with 54.01 times for rival Palo Alto Networks and 81.56 times for Zscaler.
Reuters
3 days ago
- Business
- Reuters
CrowdStrike shares drop as Windows-outage fallout hits forecast
June 4 (Reuters) - CrowdStrike (CRWD.O), opens new tab shares slumped 7% in premarket trading after the cybersecurity company forecast its second-quarter revenue below analysts' estimates, weighed down by its customer retention efforts following a Windows-related outage last year. Following the outage caused by faulty update to its "Falcon Sensor" software in July 2024, the company introduced incentive packages that included discounts and flexible payment terms to reassure and retain customers. CEO George Kurtz said in March that CrowdStrike wrapped up the Customer Commitment Packages (CCP) program at the end of fourth quarter. The program reduced revenue growth because subscriptions lasted longer due to extensions offered by the company. It also impacted new opportunities, as these incentives provided additional features at no extra cost. Finance chief Burt Podbere said CCP-related initiatives reduced revenue by about $11 million in the first quarter, with an expected continued impact of $10 million to $15 million per quarter for the remainder of the fiscal year. The Austin, Texas-based company reported loss per share of 44 cents in the quarter ended April 30, compared with a profit per share of 17 cents a year earlier. If premarket losses hold, CrowdStrike could lose more than $8 billion from its market value of $121.74 billion, despite its stock having surged around 43% this year. "We believe CRWD is taking share from other vendors across their product offerings," Truist Securities said. At least 18 brokerages raised their price target after the company's first quarter revenue came in-line with estimates, while adjusted profit per share exceeded the target. The results follow the company's announcement last month that it would layoff about 500 employees in a bid to streamline operations and work toward its goal of $10 billion in annual recurring revenue. CrowdStrike trades at 123.69 times the estimates of its earnings for the next 12 months, compared with 54.01 times for rival Palo Alto Networks (PANW.O), opens new tab and 81.56 times for Zscaler (ZS.O), opens new tab.
