CrowdStrike (CRWD) Earnings Implied Volatility Crush Suggest Upside After Result
$CrowdStrike Holdings, Inc.(CRWD)$ is expected to release earnings on 28 Nov 2023 after market close.
CRWD endpoint security which deals with protecting “endpoints” or laptops, tablets, mobile phones, internet-of-things (IoT), and point-of-sale systems against cyberattacks is getting more important as there have been an increase incidents of scam and attacks on individuals.
CRWD leverages its proprietary Falcon platform and AI to detect, prevent, and respond to cyberattacks. CRWD has a 18% of the $8.6 billion Endpoint Security market.
CRWD last Q2 2024 reported earnings on 30 Aug 2023, saw its shares gained +9.3% the day following the earnings announcement to close at 163.03.
Following its earnings release, 89 days ago, CRWD stock has drifted +28.9% higher. From the time it announced earnings, CRWD traded in a range between 157.59 and 213.14.
The last price (210.07) is closer to the higher end of range. Market is expecting a $0.74
CrowdStrike (CRWD) Upcoming Earnings Guidance
CRWD has issued earnings guidance for Q3 2024. EPS is estimated at 0.74, which would be a85% increase from the same period last year. Revenue estimate in the range of775.4 M to 778.0 M, which would be a 34% increase from the same period last year.
CRWD technical has provided an uptrend signal ahead of its earnings release.
CrowdStrike (CRWD) Historical Moves Ahead of Earnings
CRWD stock had mixed performance leading up to earnings. CrowdStrike shares traded lower, on average, in the one week, three day, two day, and one day periods heading into an earnings report. The best performance was two weeks ahead of earnings for an average gain of 3.1%
CrowdStrike (CRWD) Historical Stock Price Reaction to Earnings
CRWD shares have moved higher in the immediate aftermath of earnings 6 out of 12 previous reports. On average the stock moved up 1.0% in the first day of trading after the company reported earnings.
CrowdStrike (CRWD) Stock Behavior After Earnings
Based on the previous 12 earnings releases, CRWD is more likely to trade lower 1 day after earnings for an average loss of -1.0%
CrowdStrike (CRWD) Post Earnings Announcement Drift
CRWD share price has drifted up 28.9% post earnings announcement. Using the last 12 quarters data, the average drift between earnings announcements is 3.2%. The current drift represents a positive 1.4 standard deviation move.
Current post earnings announcement drift: 28.9%
Historical average post earnings announcement drift: 3.2%
Historical post earnings drift standard deviation move: ±20.1%
CrowdStrike (CRWD) EPS and Revenue Surprise
The last 2 quarterly report, CRWD has surprised on the EPS and revenue estimate, but price effect is not consistent. We saw a better gain in the last reported earnings for Q2 2024.
CrowdStrike (CRWD) Post Earnings Movement
The options market overestimated CRWD stocks earnings move 67% of the time in the last 12 quarters. The predicted move after earnings announcement was ±9.1% on average vs an average of the actual earnings moves of 7.1% (in absolute terms).
CrowdStrike (CRWD) Earnings Implied Volatility Crush
CRWD's last earnings implied volatility (IV30) going into earnings was 50.0. The last time CRWD released earnings, the implied volatility dropped to 36.1, resulting in an implied volatility crush of 28%.
5 days after earnings, the 30 day IV was 33.4. I would be expecting the IV to drop after earnings, hence, this should be a bullish upside for CRWD.
Average Implied Volatility Crush For CRWD Earnings: 21%
Average 30 Day Implied Volatility 1 Day Before Earnings: 62.8
Average CRWD 30 Day IV for the Day of Earnings: 49.6
Average 30 Day Implied Volatility 5 Days After Earnings: 48.7
Summary
Based on what we have seen from CRWD’s services demand, they should do well as the demand for endpoint security protection is increasing, and CRWD has quite a significant market share of 18%.
I would be expecting CRWD to pull back a bit before its result. After that, we should be able to see a pretty good gains post earnings.
Appreciate if you could share your thoughts in the comment section whether you think CRWD would beat both EPS and revenue estimate and provide a good gain on its share price post earnings?
@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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It's impressive how CRWD has capitalized on the increasing demand for endpoint security. Do you see them expanding even further?
Anticipating CRWD's results—do you think they'll manage to exceed expectations given the current market dynamics?
Given their stronghold in endpoint security, could this be an opportunity for strategic entry?
I'm optimistic about CRWD's prospects, especially with the rising need for endpoint security.
Do you think they'll continue to lead the charge as demand grows?