CrowdStrike May Keep Falling From Here

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CrowdStrike May Keep Falling From Here

seekingalpha08-02

CrowdStrike Holdings stock has dropped over 35% in two weeks. Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.I think the dual view of CRWD's future is ...

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Sharkie
·08-02
if you think it's a dead cat bounce and the medium term for crowdstrike is gloomy, then your call should be a sell , why is it a hold ?
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Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.I think the dual view of CRWD's future is ...</p>\n\n<a href=\"https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>CrowdStrike May Keep Falling From Here</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCrowdStrike May Keep Falling From Here\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-02 11:09 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>CrowdStrike Holdings stock has dropped over 35% in two weeks. Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.I think the dual view of CRWD's future is ...</p>\n\n<a href=\"https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here","article_id":"2456485496","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2456485496","pubTimestamp":1722568198,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"As we know, a simple update glitch in CrowdStrike's Falcon Sensor cybersecurity platform resulted in the \"blue screen of death\" for many Microsoft's  Windows systems and disrupted access to Microsoft 365 services globally, causing delayed flights and other disruptions around the globe. 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Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.I think the dual view of CRWD's future is preventing the market from finding a consensus estimate for EPS that is close to reality.I think CRWD's margins will come under pressure over the next few quarters. However, the consensus doesn't seem to see this, still looking quite optimistic.Despite short-term recovery potential, the medium-term outlook for CRWD remains uncertain due to potential EPS/revenue misses and margin pressures.If FY2025 guidance is lowered, I fear CRWD could end up another 20-30% below current levels, as the company's valuation implies a premium to its peers. I rate CRWD as a \"Hold\" right away.Klaus Vedfelt/DigitalVision via Getty ImagesIntro & ThesisIt's been about two weeks since the software outage at CrowdStrike Holdings (NASDAQ:CRWD), and in that time, the shares of one of the world's largest cybersecurity companies have fallen more than 35%, while the 200-day moving average, which has been a reliable support for CRWD in previous corrections, has proven powerless.TrendSpider Software, CRWD daily, notes addedSuch a strong corrective move cannot last forever - I think CRWD is destined to rebound by 15-20% at some point, which will depend heavily on how soon the current negative sentiment changes. However, I am also convinced that the current lows are not the bottom for the stock, as current forecasts still do not take into account the potential risk of customer churn, and individual banks paint what I believe is an overly optimistic picture. In terms of its valuation after the outage, CRWD should be trading at best in line with its peers, and not at a premium, as is the case today.Why Do I Think So?As we know, a simple update glitch in CrowdStrike's Falcon Sensor cybersecurity platform resulted in the \"blue screen of death\" for many Microsoft's (MSFT) Windows systems and disrupted access to Microsoft 365 services globally, causing delayed flights and other disruptions around the globe. While CrowdStrike's CEO immediately clarified that the problem \"wasn't a security incident but a defect in an update, which has been fixed\", this comment doesn't change a) the awareness of the risks of instability in large tech companies' relationships with their counterparties and b) the consequences of litigation for CRWD and the ongoing reputational damage.As the Seeking Alpha News team reported recently, Delta Air Lines (DAL), whose operations were \"severely impacted for several days due to the outage\", hired renowned attorney David Boies from Boies Schiller Flexner to seek damages from CrowdStrike. Wall Street analysts estimated the disruption could cost Delta up to $500 million, or $0.60 per share, for Q3 and FY2024 (according to Citigroup). It's clear that this process can drag on for many months, but the initiation of the process itself will definitely affect the risk profile of CRWD - in many ways, the continuation of the correction that began 2 weeks ago suggests that this risk has been actively priced in since the news was released.What surprises me is the ambiguity of Wall Street analysts' reaction to what happened. For example, according to the source above, an analyst from Morgan Stanley noted that CrowdStrike seems capable of recovering swiftly due to its prompt response. I can't entirely agree with that. Imagine you work as a trader and on one unfortunate day your desk loses 500 million dollars due to a technical error that occurred due to your fault. Everyone knows it's your fault. You immediately say, \"I'm sorry, here's your $10 promo code for Uber Eats\". What are the chances of you keeping your position at the desk after that? And what are the chances that you will be accepted at another bank in the foreseeable future? I think the answers to these questions are obvious.So again, while some banks like Needham and Jefferies are raising critical questions about the future of CRWD in terms of potential negative consequences, some other banks like Morgan Stanley or Bank of America continue to act, in my opinion, as if nothing bad has happened for CRWD's long-term future and the market is simply overreacting.BofA research also determined CrowdStrike faces minimal liability from the event due to service-level agreements, insurance policies covering business disruptions and the fact that most customers remediated the issue within a few hours before triggering claims through insurance policies.I think the dual view of CRWD's future is preventing the market from finding a consensus estimate for EPS that is close to reality. It's not so much about litigation risks, but more about potentially higher OPEX to retain existing customers - I think CRWD's margins will come under pressure over the next few quarters. However, the consensus doesn't seem to see this - even in the earnings revisions we see limited impact on Q2 and Q3 of FY2025 numbers:Seeking Alpha, CRWD's Earnings RevisionsTherefore, I can't ignore the risk whose materialization will almost certainly guarantee the continuation of today's correction for CRWD stock - that is a potential miss on EPS or revenue consensus in Q2 or Q3. According to Seeking Alpha, the company will report for Q2 FY2025 in a month. And even if CRWD beats today's consensus for the quarter, the market will wait to see what management forecasts for Q3 and beyond, and if the impact of the outage passes by Q2, it's far from certain that management won't lower its guidance for the full year. If FY2025 guidance is lowered, I fear CRWD could end up another 20-30% below current levels, as the company's valuation implies a premium to its peers (even taking into account the recent correction).YCharts, author's notesHow do I arrive at the 20-30% downside potential? That's pretty simple. In the chart above, I show how the current premium to the company's valuation can be explained: The P/E ratio of 58.3x is likely due to FWD earnings per share growth, which is higher than the average growth rate of other peers. However, if I'm right and a) CRWD's margins are at risk and b) the reputational damage is causing some customers to leave, or new customer acquisition is insufficient, then the currently projected growth rate could easily fall to the industry average. Then CRWD's valuation premium would lose all meaning, and the P/E ratio could also fall to a fair average, around 45-48x. This would correspond exactly to the downside potential of 21-30% of the current stock price.The Bottom LineDespite my rather gloomy assessment of the medium-term recovery prospects of CRWD stock, I rate it as a \"Hold\" for the time being, as I recognize its short-term recovery prospects. As I mentioned at the very beginning of my article, when a stock, even one as overvalued as CRWD, drops 30-40% in just one month, it usually results in a short-term bounce. I believe it should be a so-called 'dead cat bounce' in CRWD's case, but as the analysts at Argus Research (proprietary source, July 2024) wrote, \"CrowdStrike software is competitive with the best offerings in the market\", so who knows, maybe management will do something phenomenal and rather quickly to retain customers and completely break the current downtrend. In the medium term, however, I think this will be difficult to do - the prospects of a continuation of the correction even after the bounce I describe above look much more realistic, especially in view of the still high earnings expectations to date.So I rate CRWD as a \"Hold\" right away.Thank you for reading!","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":334040325226584,"gmtCreate":1722586110893,"gmtModify":1722586114846,"author":{"id":"3570070988174561","authorId":"3570070988174561","name":"Sharkie","avatar":"https://static.tigerbbs.com/631c9e9d4680a952704a2d3eef7bfbc8","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3570070988174561","authorIdStr":"3570070988174561"},"htmlText":"if you think it's a dead cat bounce and the medium term for crowdstrike is gloomy, then your call should be a sell , why is it a hold ?&nbsp;","listText":"if you think it's a dead cat bounce and the medium term for crowdstrike is gloomy, then your call should be a sell , why is it a hold ?&nbsp;","text":"if you think it's a dead cat bounce and the medium term for crowdstrike is gloomy, then your call should be a sell , why is it a hold ?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/334040325226584","repostId":2456485496,"repostType":4,"repost":{"id":"2456485496","kind":"highlight","pubTimestamp":1722568198,"share":"https://ttm.financial/m/news/2456485496?lang=&edition=fundamental","pubTime":"2024-08-02 11:09","market":"fut","language":"en","title":"CrowdStrike May Keep Falling From Here","url":"https://stock-news.laohu8.com/highlight/detail?id=2456485496","media":"seekingalpha","summary":"As we know, a simple update glitch in CrowdStrike's Falcon Sensor cybersecurity platform resulted in the \"blue screen of death\" for many Microsoft's  Windows systems and disrupted access to Microsoft 365 services globally, causing delayed flights and other disruptions around the globe. While CrowdStrike's CEO immediately clarified that the problem \"wasn't a security incident but a defect in an update, which has been fixed\", this comment doesn't change a) the awareness of the risks of instability in large tech companies' relationships with their counterparties and b) the consequences of litigation for CRWD and the ongoing reputational damage. As the Seeking Alpha News team reported recently, Delta Air Lines , whose operations were \"severely impacted for several days due to the outage\", hired renowned attorney David Boies from Boies Schiller Flexner to seek damages from CrowdStrike. Wall Street analysts estimated the disruption could cost Delta up to $500 million, or $0.60 per share, for","content":"<html><head></head><body><ul style=\"\"><li><p>CrowdStrike Holdings stock has dropped over 35% in two weeks. Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.</p></li><li><p>I think the dual view of CRWD&#39;s future is preventing the market from finding a consensus estimate for EPS that is close to reality.</p></li><li><p>I think CRWD&#39;s margins will come under pressure over the next few quarters. However, the consensus doesn&#39;t seem to see this, still looking quite optimistic.</p></li><li><p>Despite short-term recovery potential, the medium-term outlook for CRWD remains uncertain due to potential EPS/revenue misses and margin pressures.</p></li><li><p>If FY2025 guidance is lowered, I fear CRWD could end up another 20-30% below current levels, as the company&#39;s valuation implies a premium to its peers. I rate CRWD as a &#34;Hold&#34; right away.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7557e76d6e8d1905922ecdf24187a098\" tg-width=\"750\" tg-height=\"500\"/></p><p>Klaus Vedfelt/DigitalVision via Getty Images</p><p></p><h2 id=\"id_1378451548\">Intro &amp; Thesis</h2><p>It&#39;s been about two weeks since the software outage at <strong>CrowdStrike Holdings </strong>(NASDAQ:CRWD), and in that time, the shares of one of the world&#39;s largest cybersecurity companies have fallen more than 35%, while the 200-day moving average, which has been a reliable support for CRWD in previous corrections, has proven powerless.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/cfdcdf50861dbd6f382923fb35a9a355\" tg-width=\"640\" tg-height=\"302\"/></p><p>TrendSpider Software, CRWD daily, notes added</p><p></p><p>Such a strong corrective move cannot last forever - I think CRWD is destined to rebound by 15-20% at some point, which will depend heavily on how soon the current negative sentiment changes. However, I am also convinced that the current lows are not the bottom for the stock, as current forecasts still do not take into account the potential risk of customer churn, and individual banks paint what I believe is an overly optimistic picture. In terms of its valuation after the outage, CRWD should be trading at best in line with its peers, and not at a premium, as is the case today.</p><h2 id=\"id_696534475\">Why Do I Think So?</h2><p>As we know, a simple update glitch in CrowdStrike&#39;s Falcon Sensor cybersecurity platform resulted in the &#34;blue screen of death&#34; for many Microsoft&#39;s (MSFT) Windows systems and disrupted access to Microsoft 365 services globally, causing delayed flights and other disruptions around the globe. While CrowdStrike&#39;s CEO immediately clarified that the problem &#34;wasn&#39;t a security incident but a defect in an update, which has been fixed&#34;, this comment doesn&#39;t change a) the awareness of the risks of instability in large tech companies&#39; relationships with their counterparties and b) the consequences of litigation for CRWD and the ongoing reputational damage.</p><p>As the Seeking Alpha News team reported recently, Delta Air Lines (DAL), whose operations were &#34;severely impacted for several days due to the outage&#34;, hired renowned attorney David Boies from Boies Schiller Flexner to seek damages from CrowdStrike. Wall Street analysts estimated the disruption could cost Delta up to $500 million, or $0.60 per share, for Q3 and FY2024 (according to Citigroup). It&#39;s clear that this process can drag on for many months, but the initiation of the process itself will definitely affect the risk profile of CRWD - in many ways, the continuation of the correction that began 2 weeks ago suggests that this risk has been actively priced in since the news was released.</p><p>What surprises me is the ambiguity of Wall Street analysts&#39; reaction to what happened. For example, according to the source above, an analyst from Morgan Stanley noted that CrowdStrike seems capable of recovering swiftly due to its prompt response. I can&#39;t entirely agree with that. Imagine you work as a trader and on one unfortunate day your desk loses 500 million dollars due to a technical error that occurred due to your fault. Everyone knows it&#39;s your fault. You immediately say, &#34;I&#39;m sorry, here&#39;s your $10 promo code for Uber Eats&#34;. What are the chances of you keeping your position at the desk after that? And what are the chances that you will be accepted at another bank in the foreseeable future? I think the answers to these questions are obvious.</p><p>So again, while some banks like Needham and Jefferies are raising critical questions about the future of CRWD in terms of potential negative consequences, some other banks like Morgan Stanley or Bank of America continue to act, in my opinion, as if nothing bad has happened for CRWD&#39;s long-term future and the market is simply overreacting.</p><blockquote><p><em>BofA research also determined CrowdStrike faces minimal liability from the event due to service-level agreements, insurance policies covering business disruptions and the fact that most customers remediated the issue within a few hours before triggering claims through insurance policies.</em></p></blockquote><p>I think the dual view of CRWD&#39;s future is preventing the market from finding a consensus estimate for EPS that is close to reality. It&#39;s not so much about litigation risks, but more about potentially higher OPEX to retain existing customers - I think CRWD&#39;s margins will come under pressure over the next few quarters. However, the consensus doesn&#39;t seem to see this - even in the earnings revisions we see limited impact on Q2 and Q3 of FY2025 numbers:</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/c1d2fc4254fc670586c650910bf44268\" tg-width=\"640\" tg-height=\"349\"/></p><p>Seeking Alpha, CRWD&#39;s Earnings Revisions</p><p></p><p>Therefore, I can&#39;t ignore the risk whose materialization will almost certainly guarantee the continuation of today&#39;s correction for CRWD stock - that is a potential miss on EPS or revenue consensus in Q2 or Q3. According to Seeking Alpha, the company will report for Q2 FY2025 in a month. And even if CRWD beats today&#39;s consensus for the quarter, the market will wait to see what management forecasts for Q3 and beyond, and if the impact of the outage passes by Q2, it&#39;s far from certain that management won&#39;t lower its guidance for the full year. If FY2025 guidance is lowered, I fear CRWD could end up another 20-30% below current levels, as the company&#39;s valuation implies a premium to its peers (even taking into account the recent correction).</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/04205d7863eadb8103671b6c8c0ff8c7\" tg-width=\"640\" tg-height=\"298\"/></p><p>YCharts, author&#39;s notes</p><p></p><p>How do I arrive at the 20-30% downside potential? That&#39;s pretty simple. In the chart above, I show how the current premium to the company&#39;s valuation can be explained: The P/E ratio of 58.3x is likely due to FWD earnings per share growth, which is higher than the average growth rate of other peers. However, if I&#39;m right and a) CRWD&#39;s margins are at risk and b) the reputational damage is causing some customers to leave, or new customer acquisition is insufficient, then the currently projected growth rate could easily fall to the industry average. Then CRWD&#39;s valuation premium would lose all meaning, and the P/E ratio could also fall to a fair average, around 45-48x. This would correspond exactly to the downside potential of 21-30% of the current stock price.</p><h2 id=\"id_2994147219\">The Bottom Line</h2><p>Despite my rather gloomy assessment of the medium-term recovery prospects of CRWD stock, I rate it as a &#34;Hold&#34; for the time being, as I recognize its short-term recovery prospects. As I mentioned at the very beginning of my article, when a stock, even one as overvalued as CRWD, drops 30-40% in just one month, it usually results in a short-term bounce. I believe it should be a so-called &#39;dead cat bounce&#39; in CRWD&#39;s case, but as the analysts at Argus Research (proprietary source, July 2024) wrote, &#34;CrowdStrike software is competitive with the best offerings in the market&#34;, so who knows, maybe management will do something phenomenal and rather quickly to retain customers and completely break the current downtrend. In the medium term, however, I think this will be difficult to do - the prospects of a continuation of the correction even after the bounce I describe above look much more realistic, especially in view of the still high earnings expectations to date.</p><p>So I rate CRWD as a &#34;Hold&#34; right away.</p><p><em>Thank you for reading!</em></p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>CrowdStrike May Keep Falling From Here</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCrowdStrike May Keep Falling From Here\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-02 11:09 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>CrowdStrike Holdings stock has dropped over 35% in two weeks. Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.I think the dual view of CRWD's future is ...</p>\n\n<a href=\"https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4588":"碎股","IE00B19Z8X17.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH  \"AG\" (USD) ACC","BK4579":"人工智能","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU1951198990.SGD":"Natixis Thematics AI & Robotics Fund H-R/A SGD-H","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LU2125909593.SGD":"Natixis Thematics Meta R/A SGD","LU1951200564.SGD":"Natixis Thematics AI & Robotics Fund R/A SGD","BK4560":"网络安全概念","BK4581":"高盛持仓","LU2286300806.USD":"Allianz Cyber Security AT Acc USD","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","IE00BFMHRM44.USD":"NEUBERGER BERMAN GLOBAL EQUITY MEGATRENDS \"A\" (USD) ACC","IE00B4JS1V06.HKD":"JANUS HENDERSON BALANCED \"A2\" (HKD) ACC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","LU1917777945.USD":"安联专题基金Cl AT Acc","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","IE0004086264.USD":"BNY MELLON GLOBAL OPPORTUNITIES \"A\" (USD) ACC","LU1974910355.USD":"Allianz Thematica Cl AMg DIS USD","LU2433249047.HKD":"THEMATICS META \"R/A\" (HKD) ACC","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU1923622614.USD":"Natixis Thematics Meta R/A USD","IE00B894F039.SGD":"Legg Mason ClearBridge - US Aggressive Growth A Acc SGD-H","CRWD":"CrowdStrike Holdings, Inc.","IE0004091025.USD":"BNY MELLON GLOBAL OPPORTUNITIES \"B\" (USD) ACC","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","LU2125909759.SGD":"Natixis Thematics Safety H-R/A SGD","BK4592":"伊斯兰概念","LU2125909916.SGD":"Natixis Thematics Safety R/A SGD","BK4567":"ESG概念","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","BK4585":"ETF&股票定投概念","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","LU1923622291.USD":"Natixis Thematics Safety R/A USD","BK4576":"AR","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","BK4566":"资本集团","IE00BFXG0V08.USD":"BNY MELLON GLOBAL LEADERS \"B\" (USD) ACC","BK4587":"ChatGPT概念","IE00BDRTCR15.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC A","IE00B5949003.HKD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A\" (HKD) ACC","IE00B19Z9Z06.USD":"Legg Mason ClearBridge - US Aggressive Growth A Acc USD","BK4577":"网络游戏","LU0314104364.USD":"MANULIFE GF AMERICAN GROWTH \"AA\" (USD) INC"},"source_url":"https://seekingalpha.com/article/4708985-crowdstrike-may-keep-falling-from-here","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2456485496","content_text":"CrowdStrike Holdings stock has dropped over 35% in two weeks. Although it may rebound shortly depending on sentiment change, I think more downside lies ahead.I think the dual view of CRWD's future is preventing the market from finding a consensus estimate for EPS that is close to reality.I think CRWD's margins will come under pressure over the next few quarters. However, the consensus doesn't seem to see this, still looking quite optimistic.Despite short-term recovery potential, the medium-term outlook for CRWD remains uncertain due to potential EPS/revenue misses and margin pressures.If FY2025 guidance is lowered, I fear CRWD could end up another 20-30% below current levels, as the company's valuation implies a premium to its peers. I rate CRWD as a \"Hold\" right away.Klaus Vedfelt/DigitalVision via Getty ImagesIntro & ThesisIt's been about two weeks since the software outage at CrowdStrike Holdings (NASDAQ:CRWD), and in that time, the shares of one of the world's largest cybersecurity companies have fallen more than 35%, while the 200-day moving average, which has been a reliable support for CRWD in previous corrections, has proven powerless.TrendSpider Software, CRWD daily, notes addedSuch a strong corrective move cannot last forever - I think CRWD is destined to rebound by 15-20% at some point, which will depend heavily on how soon the current negative sentiment changes. However, I am also convinced that the current lows are not the bottom for the stock, as current forecasts still do not take into account the potential risk of customer churn, and individual banks paint what I believe is an overly optimistic picture. In terms of its valuation after the outage, CRWD should be trading at best in line with its peers, and not at a premium, as is the case today.Why Do I Think So?As we know, a simple update glitch in CrowdStrike's Falcon Sensor cybersecurity platform resulted in the \"blue screen of death\" for many Microsoft's (MSFT) Windows systems and disrupted access to Microsoft 365 services globally, causing delayed flights and other disruptions around the globe. While CrowdStrike's CEO immediately clarified that the problem \"wasn't a security incident but a defect in an update, which has been fixed\", this comment doesn't change a) the awareness of the risks of instability in large tech companies' relationships with their counterparties and b) the consequences of litigation for CRWD and the ongoing reputational damage.As the Seeking Alpha News team reported recently, Delta Air Lines (DAL), whose operations were \"severely impacted for several days due to the outage\", hired renowned attorney David Boies from Boies Schiller Flexner to seek damages from CrowdStrike. Wall Street analysts estimated the disruption could cost Delta up to $500 million, or $0.60 per share, for Q3 and FY2024 (according to Citigroup). It's clear that this process can drag on for many months, but the initiation of the process itself will definitely affect the risk profile of CRWD - in many ways, the continuation of the correction that began 2 weeks ago suggests that this risk has been actively priced in since the news was released.What surprises me is the ambiguity of Wall Street analysts' reaction to what happened. For example, according to the source above, an analyst from Morgan Stanley noted that CrowdStrike seems capable of recovering swiftly due to its prompt response. I can't entirely agree with that. Imagine you work as a trader and on one unfortunate day your desk loses 500 million dollars due to a technical error that occurred due to your fault. Everyone knows it's your fault. You immediately say, \"I'm sorry, here's your $10 promo code for Uber Eats\". What are the chances of you keeping your position at the desk after that? And what are the chances that you will be accepted at another bank in the foreseeable future? I think the answers to these questions are obvious.So again, while some banks like Needham and Jefferies are raising critical questions about the future of CRWD in terms of potential negative consequences, some other banks like Morgan Stanley or Bank of America continue to act, in my opinion, as if nothing bad has happened for CRWD's long-term future and the market is simply overreacting.BofA research also determined CrowdStrike faces minimal liability from the event due to service-level agreements, insurance policies covering business disruptions and the fact that most customers remediated the issue within a few hours before triggering claims through insurance policies.I think the dual view of CRWD's future is preventing the market from finding a consensus estimate for EPS that is close to reality. It's not so much about litigation risks, but more about potentially higher OPEX to retain existing customers - I think CRWD's margins will come under pressure over the next few quarters. However, the consensus doesn't seem to see this - even in the earnings revisions we see limited impact on Q2 and Q3 of FY2025 numbers:Seeking Alpha, CRWD's Earnings RevisionsTherefore, I can't ignore the risk whose materialization will almost certainly guarantee the continuation of today's correction for CRWD stock - that is a potential miss on EPS or revenue consensus in Q2 or Q3. According to Seeking Alpha, the company will report for Q2 FY2025 in a month. And even if CRWD beats today's consensus for the quarter, the market will wait to see what management forecasts for Q3 and beyond, and if the impact of the outage passes by Q2, it's far from certain that management won't lower its guidance for the full year. If FY2025 guidance is lowered, I fear CRWD could end up another 20-30% below current levels, as the company's valuation implies a premium to its peers (even taking into account the recent correction).YCharts, author's notesHow do I arrive at the 20-30% downside potential? That's pretty simple. In the chart above, I show how the current premium to the company's valuation can be explained: The P/E ratio of 58.3x is likely due to FWD earnings per share growth, which is higher than the average growth rate of other peers. However, if I'm right and a) CRWD's margins are at risk and b) the reputational damage is causing some customers to leave, or new customer acquisition is insufficient, then the currently projected growth rate could easily fall to the industry average. Then CRWD's valuation premium would lose all meaning, and the P/E ratio could also fall to a fair average, around 45-48x. This would correspond exactly to the downside potential of 21-30% of the current stock price.The Bottom LineDespite my rather gloomy assessment of the medium-term recovery prospects of CRWD stock, I rate it as a \"Hold\" for the time being, as I recognize its short-term recovery prospects. As I mentioned at the very beginning of my article, when a stock, even one as overvalued as CRWD, drops 30-40% in just one month, it usually results in a short-term bounce. I believe it should be a so-called 'dead cat bounce' in CRWD's case, but as the analysts at Argus Research (proprietary source, July 2024) wrote, \"CrowdStrike software is competitive with the best offerings in the market\", so who knows, maybe management will do something phenomenal and rather quickly to retain customers and completely break the current downtrend. In the medium term, however, I think this will be difficult to do - the prospects of a continuation of the correction even after the bounce I describe above look much more realistic, especially in view of the still high earnings expectations to date.So I rate CRWD as a \"Hold\" right away.Thank you for reading!","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":7,"commentSize":1,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}