Please ensure Javascript is enabled for purposes of website accessibility

Why CrowdStrike Stock Jumped 21.5% Last Month

By Keith Noonan – Updated May 11, 2020 at 9:20AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cybersecurity company is crushing the market in 2020 and is up roughly 55% year to date.

What happened

Shares of CrowdStrike Holdings (CRWD -0.55%) climbed 21.5% in April, according to data from S&P Global Market Intelligence. The cybersecurity company's stock dipped 6.6% amid March's coronavirus-driven sell-offs, but shares posted big gains in conjunction with momentum for the broader market last month.

^SPX Chart

^SPX data by YCharts.

CrowdStrike stock lost ground as coronavirus-related concerns rocked the market in March, but the company published strong fourth-quarter results in the month that helped its share price recover quickly. With the broader market rebounding in April, investors continued to reward CrowdStrike for its rapid fourth-quarter sales growth and encouraging guidance by bidding up the stock. 

A lock icon.

Image source: Getty Images.

So what

Impressive sales momentum and coronavirus-related conditions driving business and communication to digital channels have helped CrowdStrike stock post big gains in 2020.

Shares hit a 52-week low in mid-March. But fourth-quarter results arrived on March 19 and spurred a recovery thanks to performance that included 89% year-over-year sales growth, 92% growth for annual recurring revenue, and subscription gross margin climbing to 75% from 70% in the prior-year quarter. Momentum from the strong Q4 results carried through to April and was amplified by recovery for the broader market.

Now what

The stock has continued to climb in May's trading. The company's share price is up roughly 15% in the month so far.

CrowdStrike is scheduled to report first-quarter earnings and host a conference call after the market closes on June 2. The company is guiding for first-quarter sales between $164.3 million and $167.6 million, representing year-over-year growth of 72.6% at the midpoint of the target. Management is forecasting an adjusted loss per share between $0.06 and $0.07 in the quarter, narrowing substantially from its adjusted loss of $0.47 per share in last year's period.

For the full year, CrowdStrike is targeting sales between $723.3 million and $733.5 million (up roughly 51% annually at the midpoint of the range) and an adjusted loss per share between $0.10 and $0.14. The company posted an adjusted loss per share of $0.42 in 2019, so it looks like the business is quickly moving toward profitability while still delivering impressive sales growth.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of CrowdStrike Holdings, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

CrowdStrike Holdings, Inc. Stock Quote
CrowdStrike Holdings, Inc.
CRWD
$160.39 (-0.55%) $0.89

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.