Crowdstrike Holdings statement alerted investors
2022.11.30 07:32
Crowdstrike Holdings statement alerted investors
Budrigannews.com – Cybersecurity stocks were hit hard on Wednesday following a warning from Crowdstrike Holdings Inc. that customers were cutting back on spending and delaying purchases as a result of the slowdown in the economy.
Before the bell, shares of Crowdstrike plunged 20% following the company’s Tuesday forecast of revenue for the current quarter that fell short of analysts’ expectations, while Zscaler (NASDAQ:) SentinelOne, Inc. (NYSE:) Inc and Palo Alto Organizations (NASDAQ:) Inc decreased by between 2.0% and 6.2%.
According to Crowdstrike Chief Executive Officer George Kurtz, “increased macroeconomic headwinds elongated sales cycles with smaller customers and caused some larger customers to pursue multi-phase subscription start dates.”
The findings are the most recent in a long line of pessimistic reports from cybersecurity businesses, whose revenue surged during the pandemic but is currently declining, making them a popular target for buyouts by private equity funds.
Analysts at Piper Sandler stated, “Resilient, but not immune is a theme that will likely dominate the narrative during our October quarter-cohort earnings cycle.”
On their earnings calls, “both Palo Alto Networks and now Crowdstrike have talked about macro weakness entering the picture – sending a signal to prepare for further potential weakness from other vendors in the space,” the company said.
However, as more businesses use the internet and high-profile hacks force businesses to be more cautious, some analysts see long-term benefits from the rising demand for cybersecurity.
These businesses have become buyout targets as a result of this and share declines of up to 69% year to date. Vista Equity Partners agreed to acquire KnowBe4 Inc. for $4.6 billion in October, and Thoma Bravo announced earlier this year that it would acquire Ping Identity for $2.4 billion.
