CrowdStrike (NASDAQ:CRWD) is not the most well-known tech stock out there. It’s no Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT), particularly with its $25 billion market capitalization. However, that won’t stop CRWD stock from hitting new all-time highs.
Despite pulling back from the July highs, CRWD stock has been an absolute beast. Shares are up roughly 260% from the March lows, as traders continue to bid the name higher.
Investors got a perfect buying opportunity in CrowdStrike a few weeks ago, but it’s okay for those that missed their shot. There will be other opportunities with this name. While there are plenty of earnings reports hitting the wires right now, this company won’t be one of them for a while.
CrowdStrike likely won’t report earnings until September. So how can this stock hit new highs? Let’s explore.
Trading CRWD Stock
CrowdStrike is a little tricky. After coming public in June 2019, the stock was met with enthusiasm by the Street. Shares hit $100 in August, but by November, technicians were drawing in support at $45. In other words, it’s been a volatile ride.
While CRWD stock had regained momentum in early 2020, the novel coronavirus selloff hammered the stock down to a paltry $32 per share. It was a wicked blow, although we’ve seen a near-quadruple since then.
But who cares about the past — what’s going on in the future here?
We saw a beautiful dip to the 50-day moving average last month, that was instantly bought up and sent shares higher. I would love another opportunity to buy a dip down into the $100-ish area and the 50-day moving average.
The prior all-time high comes into play near $101, while the two-times extension for the 2020 range comes into play at $103. So a pullback into this area should be met with buyers.
I am more inclined to use the entire trading range dating back to the 2019 highs. That’s because the 123.6% extension of this range comes into play at $118.38, within pennies of the current high.
Preferably we get another dip before CrowdStrike’s next rally. But either way, I expect this one to make new highs. If it can clear the current high, look for a push into the $125 to $128 zone (see chart for extensions). Above opens the door for an even larger run, potentially putting $145 in play for a longer term price target. That’s the 161.8% extension of the entire range.
Why do I like the odds of CRWD stock hitting new highs? Simply put, the technicals are strong. It doesn’t hurt that the fundamentals are favorable, too.
Breaking Down CrowdStrike Stock
When CrowdStrike reported its most recent earnings report — Q1 for its 2021 fiscal year — it beat on earnings and revenue. A surprise profit of 2 cents per share came after an 85% year-over-year gain in revenue to $178 million.
Think bigger picture right now. While the coronavirus is creating disruptions around the world, business still goes on. Everyone from PepsiCo (NYSE:PEP) to General Motors (NYSE:GM) is working to adapt to the environment.
It has management teams and employees working remotely, with this shift having the appearance of remaining stable well into next year — and potentially permanently. With it, that has driven up the need for cybersecurity. A note from FireEye’s most recent earnings release reads:
Cyber security remains a top spending priority for organizations worldwide, and the uncertainty of the current environment is creating opportunities for solutions that allow customers to purchase exactly what they need, when they need it.
As a result, I think CrowdStrike has a viable growth driver and that should help drive shares higher.
Analysts expect 60% revenue growth this year to $770 million, followed by 32% growth in fiscal 2022 to just over $1 billion. Consensus expectations call for roughly break-even results this year before a swing to profitability in 2022.
Perhaps CRWD stock disappoints, but right now the trends — in the business and on the charts — are pointing in the right direction.