Will Crowdstrike Stock Benefit From Higher EPS Guidance?

Crowdstrike stock NASDAQ:CRWD

Crowdstrike stock (NASDAQ:CRWD) enjoyed a fantastic run in 2020 and into 2021, but like other technology, this previous growth-stock darling has been languishing.

However, most of that reduction is attributable to rising interest rates and a general market slowdown

What are the Long-Term Prospects for Crowdstrike Stock?

First, some background: Crowdstrike stock  (NASDAQ:CRWD) went public in June 2019 at $34. Crowdstrike stock  (NASDAQ:CRWD) ended Thursday at $161.28, so there’s no imminent danger of the company falling below its IPO price. (And, sure, a company that went public in 2019 is still considered new; in fact, firms that went public in the last 10 to 15 years are still in the running for substantial price increases in a bull market.)

Regarding other cybersecurity firms, its market valuation is now $37.64 billion, behind only Palo Alto Networks (NASDAQ:PANW) and Fortinet (NASDAQ:FTNT).

It’s true that cybersecurity isn’t going away anytime soon, but technology companies tend to suffer when interest rates increase. This is because technology and other high-growth firms choose to reinvest income in high-potential ventures rather than pay out dividends to shareholders. Higher interest rates may impair that ability, slowing economic expectations. This is particularly harmful to firms with high price-to-earnings ratios, which are common in tech stocks.

Crowdstrike Obtained Guidance

The business raised its third-quarter forecast. It anticipates profits per share in the $0.30 to $0.32 range, which is higher than experts predicted.

It forecast sales of $569.10 million to $575.90 million, which was below average projections. Nonetheless, this would be a huge gain over the previous quarter.

Crowdstrike expects full-year profits of $1.31 to $1.33 per share, about twice the earnings in fiscal 2022.

When it comes to price activity, Crowdstrike stock (NASDAQ:CRWD) has some competition in the cybersecurity market.

Small-Cap Cybersecurity Company Names

Absolute Software (NASDAQ:ABST), a small cap that develops and sells software to manage and protect business clients’ devices, applications, data, and networks, is up 36.19% in the last three months and 17.40% year to date.

This firm, which went public in October 2020, is also a recent IPO. However, with a market valuation of just $550.9 million, it is not an institutional-grade company like Crowdstrike, Palo Alto Networks, or Fortinet. Bigger investors, except for small-cap funds, prefer larger firms that are more stable and have more analyst coverage.

Unless you’re expressly looking for small-cap exposure, which is acceptable in many cases, you’ll find more solid options among bigger brands within an industry.

Featured Image-  Megapixl @ Ralfliebhold

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About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.