CrowdStrike improved its earnings outlook thanks to AI demand. What to do with stocks?
CrowdStrike shares were down about 1.5% in extended trading on Dec. 2.
Cybersecurity software developer CrowdStrike improved its earnings outlook for fiscal 2026, which ends Jan. 31, attributing it to robust demand for artificial intelligence products. The company now expects adjusted earnings per share to be between $3.7 and $3.72. The lower bound has been raised from the previous estimate, which started at $3.6, Bloomberg noted.
CrowdStrike cited its Falcon platform as a key source of new customer acquisition. "We are capitalizing on growing AI-driven demand as customers increasingly consolidate solutions on the Falcon platform, which has enabled us to generate a record high volume of potential contracts," said CrowdStrike CFO Bert Podber, he was quoted as saying in a company statement. - Given this acceleration, we are raising our outlook for fiscal 2026."
CrowdStrike shares were down about 1.5% in extended trading on Tuesday after the report was released. Shares rose 2.5% to $516.55 in the main trading, which ended before the report was published. They have gained 51% since the beginning of the year, outperforming many rivals, Bloomberg notes.
How the company reported
CrowdStrike reported that its revenue rose 22% year-on-year to $1.23 billion in the third quarter of fiscal 2026, ended Oct. 31. Analysts had expected $1.21 billion, Bloomberg writes. Adjusted earnings per share rose 24% to $0.96 cents. Wall Street expected $0.94, Barron's reported.
One of the key indicators for subscription-based software is annual recurring revenue (ARR), i.e. the amount of revenue per year recorded under existing contracts. CrowdStrike's ARR grew 23% year-over-year to $4.92 billion, slightly above analysts' expectations, Barron's said.
The company estimates revenue for the current quarter to be in the range of $1.29 billion to $1.3 billion, with analysts' average estimate of $1.29 billion, according to data compiled by Bloomberg.
What analysts recommend
Most analysts tracking CrowdStrike stock are recommending a "buy" rating on the stock, with 27 Buy ratings and eight Overweight ratings, MarketWatch shows. At the same time, 18 analysts recommend "hold" the stock (Hold), only one recommends "sell" (Underweight).
The average target price is $539.11 - just 4% higher than the last closing price.
This article was AI-translated and verified by a human editor
