Crowdstrike Holdings A
Crowdstrike Holdings A
IBD Stock Analysis
- Shares clear a high-handle entry of 260.92 out of a consolidation
- Stock holds a Relative Strength Rating of 90, second-best in its group
- CrowdStrike now is pulling away from its 10-week moving average.
Industry Group Ranking
* Not real-time data. All data shown was captured at
12:56PM EDT on
CrowdStrike Holdings (CRWD) is the IBD Stock of the Day as cybersecurity stocks rally in the wake of a widespread ransomware attack. CrowdStrike stock cleared an entry point as shares in Zscaler (ZS), Palo Alto Networks (PANW), Okta (OKTA) and CyberArk Software (CYBR) also climbed.
Cybersecurity officials worldwide are racing to assess the damage from a new ransomware linked to Russian cyber-gang REvil. The ransomware attack focused on companies that use software from Kaseya VSA. The attackers are reportedly demanding a $70 million ransomware payment.
One bullish view for cybersecurity stocks is that the Biden administration will hike spending on cybersecurity following earlier ransomware attacks on Colonial Pipeline and meat producer JBS.
Founded by two former McAfee executives in 2011, CrowdStrike specializes in security protection for network endpoints. That includes personal computers, servers, laptops, and mobile devices that access networks.
CrowdStrike’s software uses artificial intelligence and a specialized database to detect malware.
CrowdStrike Stock Joins IBD Leaderboard
CrowdStrike utilizes a patented “Threat Graph” database to analyze and correlate billions of events collected from customers in real time. The Threat Graph analyzes more than 1 trillion events per week, feeding data to CrowdStrike’s artificial intelligence algorithms.
“We think (endpoint) solutions and especially managed (endpoint) solutions like those offered by CrowdStrike play an important role in quickly alerting customers of malicious activity and updating prevention policies to protect customers going forward,” UBS analyst Roger Boyd said in a note to clients Tuesday.
Cybersecurity Stocks Rally On Ransomware Attacks
CrowdStrike stock had retreated in February and March amid a pullback in software growth stocks. The cybersecurity firm bucked investor worries over its valuation and began clawing back in May, forming a consolidation.
The stock moved just above the top of the base on June 22, then cleared a high-handle entry point of 260.92 on Tuesday. The stock is pulling away from its 10-week moving average. Shares were up 4.9% to close at 264.98 on the stock market today.
The rise of cryptocurrency Bitcoin may be tied to a spike in ransomware attacks, analysts say. Digital ransoms are often paid in Bitcoin. In ransomware attacks, predators lock up a victim’s computers until a ransom is paid.
“In terms of cleanup, while ransomware remediation is often difficult, we think there could be potential service opportunities for incident response and digital forensics providers including CRWD, Palo Alto Networks and FireEye (FEYE),” said UBS’s Boyd.
Meanwhile, Zscaler stock on Tuesday broke out from a cup-with-handle base.
CrowdStrike Stock: Expanding To Cloud Security
Sunnyvale, Calif.-based CrowdStrike earnings came in at an adjusted 10 cents a share. Revenue jumped 70% to $302.8 million, including acquisitions, the company said. Analysts had projected CrowdStrike would earn 6 cents on revenue of $291.4 million for the period ended April 30.
CrowdStrike has expanded into protecting business applications that run on public cloud computing platforms. CrowdStrike also has launched security vulnerability management services.
Additionally, the company has made two acquisitions broadening its product offerings and could make more, CrowdStrike stock analysts say. CrowdStrike in March purchased Humio, which sells cloud-based network monitoring tools, for $392 million in cash and stock.
And in September 2020, CrowdStrike acquired Preempt Security, a provider of “Zero Trust” tools, for about $96 million. Zero Trust cybersecurity models establish trust based on the credentials of a user, device and application regardless of location — either within the network perimeter or outside.
The IPO for CrowdStrike stock in June 2019 raised $659 million.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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