Sign InCrowdStrike Holdings, Inc. (CRWD) Technical Analysis & Long-Term Investment Potential
Summary
(CRWD) Analysis** _(June 04, 2024)_: Despite CRWD closing unchanged at $308.69, the stock shows promising long-term potential buoyed by strong financial performance and substantial demand in the cybersecurity sector, though current short-term trends suggest monitoring for a better entry point.
Technical Analysis
CrowdStrike Holdings, Inc. (CRWD) closed at $308.69 on June 04, 2024, showing no change for the day. The stock's Relative Strength Index (RSI14) stands at 39, indicating it is approaching oversold territory, which might signal a potential buying opportunity. The 50-day moving average is $317.36, and the 200-day moving average is $255.37, demonstrating an upward trend in both short and long-term perspectives. However, recent pricing places CRWD below its 50-day moving average, suggesting some short-term bearish momentum.
The stock has a substantial support level at $303.54 and resistance at $315.92. The Average True Range (ATR) is 4.05, indicating moderate price volatility. The Moving Average Convergence Divergence (MACD) of 17.16 suggests strong bullish momentum over the past three months. The volume of 6.67 million significantly exceeds the average volume of 3.28 million, reflecting heightened trading activity possibly due to recent positive earnings announcements.
Fundamental Analysis
CrowdStrike has showcased robust financial performance with the latest earnings surpassing estimates. Adjusted EPS for Q1 was $0.93, compared to the estimated $0.89, and revenue reached $921.04 million, exceeding projections of $904.82 million. The company forecasted Q2 revenue above market estimates, driven by heightened demand for cybersecurity in the AI landscape. Accordingly, CrowdStrike raised its full-year revenue guidance, which now ranges between $3.98 billion and $4.01 billion.
The company holds a substantial market capitalization of $70.49 billion. Despite its high PE ratio of 825.89, reflecting significant investor expectations, the recent earnings announcement and elevated demand underline its potential growth. CrowdStrike's forward-looking optimism was reinforced as it aligned with upward shifts in revenue guidance and sustained buy consensus from analysts (33 rated as 'buy' out of 34).
The discounted cash flow (DCF) valuation of $355.30 indicates that CRWD is currently trading below its intrinsic value, suggesting potential for price appreciation.
Predictions
- Next Trading Day (June 05, 2024): Given the strong volume, positive earnings report, and increased guidance, there is potential for a slight upward movement, testing the resistance at $315.92. - Upcoming Week: Expect continued volatility as the stock may oscillate between the support and resistance levels. Positive sentiment from recent earnings and higher revenue forecasts can drive the stock to attempt breaking past the $315.92 resistance.
Long-term Investment Potential
CrowdStrike's robust performance, reflected in its earnings beat and elevated forward guidance, signifies strong demand for its cybersecurity solutions. In light of the ongoing digital transformation and increasing AI-driven security needs, CrowdStrike is well-positioned for sustained growth. The intrinsic value according to DCF analysis further emphasizes the stock's long-term appreciation potential.
Evaluation
Hold
Although CRWD shows promising long-term growth due to heightened cybersecurity demand and impressive financial results, the current price below its 50-day moving average and its high PE ratio suggest monitoring for a potentially better entry point. Investors wary of short-term market volatility may consider holding the stock to capitalize on its long-term growth trajectory.
