CrowdStrike's Growth Remains Strong—Buy While It's Down

Core Viewpoint - CrowdStrike is expected to maintain its upward trend due to strong traction, momentum in deal cycles, and a forecast for record-setting performance in 2025, despite a recent stock price decline attributed to weak earnings guidance [1] Financial Performance - The company is experiencing a headwind from anticipated higher tax rates, but this is counterbalanced by robust cash flow and improving shareholder value, with trends expected to continue [2] - Analysts project a 12-month stock price forecast of $401.35, indicating a 12% upside, with a moderate buy rating based on 44 analyst ratings [2] - The consensus price target suggests a 12% upside from critical support levels, with a potential 20% increase following the earnings release [3] Analyst Sentiment - Despite concerns about slowing penetration growth and margin guidance, positive trends such as a 25% increase in Annual Recurring Revenue (ARR) and improving deal momentum are noted [4] - The long-term outlook includes a low 20% revenue compound annual growth rate (CAGR) through 2035, with earnings expected to grow at a robust 30% CAGR [5] Insider and Institutional Activity - Insider selling in Q1 2025 raises some concerns, but it does not negate the long-term outlook, as insiders hold over 4.25% of the stock and institutions are actively buying [6] - Institutional activity has shown a shift from selling in Q2 2024 to buying in Q3 and ramping up in Q1 2025, with ownership exceeding 70% of the stock [7] Financial Condition - CrowdStrike's financial condition is rapidly improving, with increased cash and assets, and a reduction in total liability leverage from 1.85x to 1.6x equity, leading to over 40% growth in equity [8] Technical Outlook - The stock has pulled back by 25% in early 2025, which is expected after a rapid rise in share price, and is currently testing for support at critical levels [9] - Support is identified near the$ 355 level, with expectations of a rebound that could lead to new highs by the end of 2025 [10]