CrowdStrike (CRWD 4.45%) stock is getting hit with a wave of sell-offs following the company's recent fourth-quarter report. The company's share price was down 8.2% as of 12:30 p.m. ET and had fallen as much as 12.1% earlier in the day.
NASDAQ: CRWD
Key Data Points
CrowdStrike published its Q4 results after the market closed yesterday, actually reporting sales and earnings that beat Wall Street's expectations. But despite posting better-than-expected quarterly results, investors are selling out of the stock due to forward guidance that came in lower than anticipated.
Q4 beats weren't enough to lift CrowdStrike stock
CrowdStrike reported non-GAAP (adjusted) earnings per share of $1.03 on sales of $1.06 billion in the fourth quarter, topping the average analyst estimate's call for per-share earnings of $0.86 on sales of $1.04 billion. The company's revenue was up 25.4% year over year in the period, and adjusted earnings per share were up 8.4%.
The business closed out the period with annual recurring revenue of $4.24 billion, representing an increase of 23%. Meanwhile, the company's Q4 performance pushed free cash flow for the year up to $1.07 billion -- good for a 14% increase. All in all, it was a good quarter and year for the business despite some significant headwinds -- but investors aren't happy with management's forward guidance.
Investors are worried about CrowdStrike's profit forecast
For this year, CrowdStrike is guiding for sales to come in between $4.744 billion and $4.805 billion, with the midpoint of that guidance range falling slightly short of the average analyst estimate's call for sales of $4.78 billion. Meanwhile, the company guided for adjusted earnings per share to come in between $3.33 and $3.45, well below the consensus Wall Street estimate's target for per-share earnings of $3.76. Management's earnings guidance suggests the business could face some significant margin pressures this year, and investors aren't happy with that outlook.
