Is it time to buy CrowdStrike stock as shares plunge despite a solid FQ3 beat?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Dec 3, 2021
  • CrowdStrike shares on Friday plunged by more than 7%.
  • The company reported its FQ3 results on Wednesday after markets closed.
  • The stock surged nearly 4% on Thursday after solid quarterly results.

On Friday, CrowdStrike Holdings Inc. (NASDAQ:CRWD) shares plunged by more than 7% to swing into a post-earnings decline despite Thursday’s spike. The stock surged nearly 4% on Thursday following a solid quarterly performance. CrowdStrike announced its most recent quarterly results Wednesday after markets closed, beating the consensus for analyst expectations.

The company posted FQ3 non-GAAP earnings per share of $0.17, beating the consensus for Street expectations of $0.10. On the other hand, its GAAP EPS of -$0.22 missed the average analyst estimate of -$0.16, while revenue for the quarter increased by 63.5% from FQ3 last year to $380.05 million, exceeding expectations by $15.86 million.

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CrowdStrike also issued better than expected fiscal fourth-quarter and FY2022 guidance on revenue and earnings.

Time to be on growth?

From an investment perspective, CrowdStrike shares trade at a steep forward P/E ratio of 267.03, making the stock less attractive to value investors. 

However, analysts expect its earnings per share to grow by 55.60% this year, before rising at an average annual rate of 73.57% over the next five years.

Therefore, the stock looks like an exciting option for investors willing to overlook short-term turbulence.

Source – TradingView

Technically, CrowdStrike seems to be trading within a sharply descending channel formation in the intraday chart. As a result, the stock has plummeted into the oversold conditions of the 14-day RSI.

Therefore, investors could target potential rebounds at about $211.18, or higher at $226.10, while $178.57 and $162.12 are crucial support levels.

After the recent pullback, it could be a perfect time to buy this high-growth stock.

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