CrowdStrike Holdings, Inc. Trading Analysis: Bullish Momentum Holds, Earnings Awaited

Technical Analysis

CrowdStrike Holdings, Inc. (NASDAQ: CRWD) closed at $313.67 on May 31, 2024, experiencing a decline of 0.71%. Recent price action witnessed a low of $306.50 and a high of $329.77, denoting significant intra-day volatility. The stock is currently trading below its 50-day moving average ($318.04) but well above the 200-day moving average ($253.76), indicating long-term bullish momentum. The Relative Strength Index (RSI14) stands at 46, suggesting that the stock is neither overbought nor oversold. The Moving Average Convergence Divergence (MACD) is positive at 18.21, signaling bullish momentum. Support and resistance levels are set at $310.21 and $315.92, respectively.

Fundamental Analysis

With a market capitalization of approximately $72.35 billion, CRWD is a significant player in the cybersecurity industry. The company's price-to-earnings (P/E) ratio is exorbitantly high at 825.45, underscoring investor expectations for future earnings growth. Earnings per share (EPS) is modest at $0.38. The volatility indicator, Average True Range (ATR), is at 4.28, indicating considerable price fluctuations. Notably, the discounted cash flow (DCF) valuation stands at $349.93, suggesting the stock is undervalued compared to its intrinsic value.

Despite recent negative sentiment cautioning investors against overpriced growth stocks, numerous analysts maintain a positive outlook on CRWD. The consensus rating is aligned towards 'Buy,' with 32 buy recommendations and no sell recommendations. Target price projections exhibit a wide dispersion, with a high of $437 and a low of $145, emphasizing varying risk perceptions.

Near-Term Predictions

For the next trading day on June 03, 2024, CRWD may experience slight downturns due to ongoing market sensitivity ahead of Q1 earnings, scheduled for June 04, 2024. Support at $310.21 is likely to be tested. Over the upcoming week, the stock's performance will be heavily influenced by the forthcoming earnings report. Positive earnings results could propel the stock past the resistance level of $315.92, whereas any missed estimates might see it testing lower support levels.

Intrinsic Value & Long-term Investment Potential

Considering the DCF valuation of $349.93, CRWD appears undervalued relative to its current market price. The strong 2023 fiscal year performance and future earnings growth potential, driven by strategic initiatives and expanding product offerings, strengthen its long-term outlook. However, the high P/E ratio reflects investor sentiment anticipating significant future earnings growth, raising the stakes for continued operational performance.

Overall Evaluation: Hold

While the stock exhibits substantial long-term growth potential, near-term uncertainties ahead of the earnings announcement necessitate cautious optimism. The current market sentiment, mixed with healthy technicals and a robust DCF valuation, makes CRWD a hold for the time being. Investors may wish to reassess positions post-earnings announcement when more clarity regarding the company's immediate financial health is available.