Shares of CrowdStrike Holdings Inc (NASDAQ:CRWD) closed at $364.3 apiece on Tuesday and fell by more than 5% in premarket trading on Wednesday.
Technical analysis pointed towards a bullish trend after the Texas-based cybersecurity technology company reported its third-quarter earnings.
What Happened: Despite the fallout from a faulty software update in July, the company reported its highest-ever revenue in the third quarter, surpassing the $1 billion mark, beating the consensus estimate of $982.36 million, curated by Benzinga.
Technical Analysis: From a technical perspective, the analysis of daily moving averages shows support for the CrowdStrike stock.
Despite falling over 5% in premarket trading on Wednesday, at $344 a piece, CrowdStrike's stock is above its 20, 50, and 200-day simple moving averages, suggesting a largely bullish trend.
On the other hand, investors can also benefit from some potential selling opportunities – the relative strength index of 68.19 suggests CrowdStrike stock is near the "overbought" territory.
Why It Matters: Even though the third-quarter non-GAAP earnings beat estimates, according to the GAAP measures in the company's press release, it reported a net loss of $16.8 million, as compared to an income of $26.7 million in the third quarter of the previous fiscal.
Additionally, the third-quarter GAAP loss from operations was reported at $55.7 million, compared to income of $3.2 million in the third quarter of fiscal 2024.
The July disruption resulted in flight cancellations globally and impacted sectors such as banking, healthcare, and hospitality. Delta Air Lines Inc. (NYSE:DAL) sued the company last month, estimating that the outage cost it $500 million.
To this, the chief financial officer Burt W. Podbere, said, "We expect Q4 free cash flow to reflect a significantly more pronounced July 19 impact in comparison to Q3."
Analyst Views: According to Benzinga Pro data, CrowdStrike has a consensus price target of $338.11 apiece based on the ratings of 42 analysts.
The high is $440 per share issued by Keybanc on July 2 and the low is $265 apiece issued by Scotiabank on Aug. 14.
The average price target of $393.33 between Evercore ISI Group, Rosenblatt, and Keybanc, implies a 14.67% upside for CrowdStrike.
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