What happened

Shares of CrowdStrike Holdings (NASDAQ:CRWD), a popular cybersecurity stock, surged 12.5% higher out of the gate Wednesday morning after a sizable "earnings beat" sparked a whole series of hikes to its price target on Wall Street. The stock remains up a healthy 5.8% as of 1:38 p.m. EDT.

Expected to report an adjusted loss of $0.06 per share on $165.4 million in sales in its fiscal first quarter of 2020, last night CrowdStrike instead reported a small $0.02 pro forma profit -- and sales of $178.1 million that shot right past the analysts' estimates.  

Stock up arrow rising over 2020

Image source: Getty Images.

So what

Granted, CrowdStrike was not profitable when profit was calculated according to generally accepted accounting principles (GAAP). The company lost $0.09 per share, GAAP. But even that was much better than the $0.55 per-share GAAP loss recorded in the prior year's first quarter. And between the unexpectedly strong pro forma number, and the fact that CrowdStrike grew its sales 85% year over year, investors seemed willing to overlook the company's GAAP unprofitability.

Now what

Wall Street was ebullient -- and rightly so. At last report, TheFly.com had clocked no fewer than 14 separate Wall Street firms raising their price targets on CrowdStrike stock, with analysts ranging from SunTrust, to Needham, to DA Davidson positing that the stock could run as high as $120 a share within a year.

(Hint: CrowdStrike stock only costs about $96 and change right now -- that's a 24% profit potential!)

It didn't hurt, of course, that CrowdStrike promised Wall Street continued improvement as the year goes on. As of the latest guidance, CrowdStrike is expecting to beat earnings estimates by reporting a pro forma loss of no more than $0.02 per share in the second quarter, and keep on beating them all year long. Full-year (pro forma) earnings are projected to be a loss of $0.05 to $0.08 per share, versus the $0.12 loss than analysts had expected.