IBP Stock +106.23% Since Nov ’07 Pick IBP Stock +106.23% Since Nov ’07 Pick Unlock Top Buy Picks

Technical Analysis Signals Strong Buy Recommendation for CrowdStrike Holdings, Inc. (CRWD)

StockInvest.us, 1 month ago

CrowdStrike Technical Analysis of CrowdStrike Holdings, Inc. (CRWD)

CrowdStrike Holdings, Inc. (Ticker: CRWD) closed the trading day on February 29, 2024, at $324.15, marking a 1.00% increase from the previous close. This uptick positioned CRWD near the higher edge of its daily range, which spanned from $321.11 to $328.94. Significantly, the stock has been on an ascending trajectory, evidenced by its last close, which is considerably above both the 50-day and 200-day moving averages, set at $290.68 and $200.56 respectively. This indicates sustained bullish momentum over both short and longer terms. The Moving Average Convergence Divergence (MACD) of 11.97 further supports this bullish outlook, suggesting that the momentum could persist.

The Average True Range (ATR) for CRWD stands at approximately 3.95, indicating a relatively high level of volatility, which is typical for stocks in the technology and cybersecurity sectors. With an RSI of 51, CRWD is neither oversold nor overbought, suggesting there is room for potential price movement without immediate reversal concerns.

Fundamental Analysis

CrowdStrike, with a market cap of approximately $74.90 billion, is a leading player in the cybersecurity space. Despite its impressive market capitalization, the company has a negative EPS of -0.06, highlighting that it is yet in a phase where it prioritizes growth and expansion over profitability. The PE ratio stands at an extraordinary -5198.13, reflecting high investor expectations for future earnings growth.

The company's upcoming earnings announcement on March 5, 2024, is highly anticipated, with strong demand for its security solutions and contributions from collaborations and recently added customers expected to positively influence its Q4 performance. Such expectations could drive short-term price action.

CrowdStrike's involvement in AI-powered solutions positions it well within an innovative and rapidly growing sector, potentially enhancing its long-term investment appeal despite current lack of profitability.

CrowdStrike Intrinsic Value and Long-term Investment Potential

Considering the DCF (Discounted Cash Flow) value at 30.01, it suggests that the stock's intrinsic value may be significantly below its current trading levels, urging caution for value-based investors. However, for growth-oriented investors, CrowdStrike's leading position in the cybersecurity industry, combined with its strategic focus on AI and extensive market opportunities, may justify the premium.

Stock Performance Predictions

For the next trading day (March 01, 2024), considering the technical momentum and upcoming earnings report, it’s reasonable to anticipate continued interest in CRWD shares, potentially pushing the price toward or even above the resistance level at $329.34. Over the upcoming week, volatility may increase as investors react to the earnings announcement. Positive surprises in the report could bolster the stock further, while any disappointment might trigger corrections, given the high expectations priced into the stock.

Overall Evaluation

Given the robust technical indicators, the potential for positive earnings surprises, and the strategic position of CrowdStrike in the growing cybersecurity and AI markets, the recommendation on CRWD is a "Buy" for growth-oriented investors with a high tolerance for volatility and a focus on long-term capital appreciation.

However, this recommendation comes with caveats. Value investors may find the current price levels and the negative EPS challenging. Moreover, given the stock's volatility, a tight stop-loss strategy may be advisable to manage risks effectively. The stock's journey is likely to be eventful, and investors are urged to stay attuned to company developments, especially the forthcoming earnings report, which could significantly impact near-term stock performance.

Check full CrowdStrike forecast and analysis here.