The stock of cybersecurity firm CrowdStrike (NASDAQ: CRWD) fell 13% as it bungled a software upgrade. This downed computer systems worldwide, the most visible being airlines. The upgrade was for systems that run Microsoft’s (NASDAQ: MSFT) Windows platform. According to the company, “a defect found in a single content update for Microsoft Windows hosts.” However, as these systems recover, will CrowdStrike’s earnings be damaged? The answer may be “no.” If so, the sell-off may be a chance to buy at a discount.
Mizuho’s Jordan Klein is one of CrowdStrike’s ongoing fans. He thinks the outage will barely hurt earnings. Malik Ahmed Khan, CFA of Morningstar, wrote an analysis titled “CrowdStrike Selloff a Buying Opportunity After Outage.” He thinks the sell-off will be short-lived. Not long ago, Morgan Stanley downgraded CrowdStrike.
CrowdStrike’s recent earnings were extraordinary. Revenue rose 33% to $921 million. Net income per share attributable to CrowdStrike common stockholders rose to $42.8 million for $491,000. Revenue for the current quarter was forecast to be $961 million, which would mean another jump from last year.
For earnings to be battered, CrowdStrike customers must leave the company in huge numbers. Their software platforms, known primarily as Falcon, offer complex cybersecurity. Not only is there a question of integration, but there is also a question of where the costumes would go.
CrowdStrike shares could rebound.
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