Investor Expectations for CrowdStrike ‘Fairly Low’ Ahead of Earnings – Morgan Stanley
2022.08.29 19:41
Investor Expectations for CrowdStrike (CRWD) ‘Fairly Low’ Ahead of Earnings – Morgan Stanley
By Sam Boughedda
CrowdStrike Holdings Inc. (NASDAQ:CRWD) will report earnings for its latest quarter aftermarket on Tuesday, August 30. Ahead of the earnings release, analysts at Jefferies and Morgan Stanley provided commentary on what they expect:
A Jefferies analyst said in his note to clients that “CRWD should exceed F2Q cons ARR growth of 57% (Jef 58%) as its broad portfolio helps alleviate potential macro concern.”
The analyst has a Buy rating and a $215 price target on the stock. He stated: “Our assumption of 5% qoq increase in New ARR vs the up 5-21% seen the past 3 F2Q’s derives $2,120M of total ARR or 58% yoy growth, modestly above cons. 57% yoy growth, which is a decel from the prior Qs 61% yoy. Management noted similar seasonality as last year (+5% qoq, implying 31% yoy new business growth). If CRWD grows incremental ARR at 15% qoq which is in line with F2Q20 (and still represents a 10 pt decel on a 2-year stack of new org ARR business growth yoy vs F1Q), it would record 59% total ARR growth. We believe given heightened valuation that expectations are likely for near 60% total ARR growth.”
Meanwhile, a Morgan Stanley analyst, who has an Overweight rating and $215 price target on CrowdStrike, said in his note that “after a modest ARR beat in Q1, investor expectations for CRWD are fairly low for FQ2.”
“Checks remain largely favorable on overall demand and CRWD’s position as market leader. While we don’t expect major upside from Q2, commentary around growing Fed pipeline in Q3 could drive fwd estimates higher,” added the analyst.
