Shares of CrowdStrike Holdings Inc. (NASDAQ: CRWD) surged Friday after the cybersecurity unicorn topped revenue estimates in its first earnings report since becoming a publicly-traded company. The stock vastly outperformed the Nasdaq and broader U.S. stock market, which came under pressure at the end of Friday’s session.

 

2020 Q1 Earnings Summary

  • Earnings: -$0.47 per share
  • Revenue: $96.1 million

CrowdStrike, a cyber security company focused on threat intelligence and cloud-based endpoint protection, generated $96.1 million in revenues during its fiscal first quarter. GAAP net losses amounted to $26 million, or -$0.47 per share. Analysts polled by Refinitiv expected sales to come in at $95.6 million. Net losses matched analysts’ forecasts.

Year-over-year revenues increased 103% while subscription sales climbed 116% to $86 million, according to TechCrunch.

Management assured investors that losses would decline in the second quarter to a range of $0.23-$0.24 per share. For the full fiscal year, losses are expected at between $0.70 and $0.72 per share.

CrowdStrike has been involved in several high-profile cyber cases, including the Sony Pictures hack and the attacks on the Democratic National Committee.

The earnings report, which was released Thursday, was the company’s first since raising over $600 million in its June initial public offering (IPO). The Sunnyvale, California-based company was founded in 2011 by George Kurtz and Dmitri Alperovitch and has been involved in several high-profile cyber cases, including the Sony Pictures hack and the attacks on the Democratic National Committee.

CrowdStrike serves 44 of the Fortune 100 companies, nine of the 20 major banks and five of the top-ten largest healthcare providers.

 

CRWD Stock on a Tear

CrowdStrike’s share price catapulted to new highs on Friday, gaining 14.8% to $83.52. From an IPO price of $34, CRWD has gained a whopping 144% in a little over a month.

Crowdstrike Share Price Since IPO - Jul 19 2019

Source: Yahoo Finance

The company’s market capitalization now stands at $16.4 billion, having gained $2.2 billion over the course of Friday’s session.

CrowdStrike earned $249 million in revenue last year, but has already leapfrogged its rival Symantec (NASDAQ: SYMC) in value. Symantec ended Friday trading at $22.27. By most accounts, Symantec is about to get bought out by Broadcom (NASDAQ:AVGO) in an all-cash deal (Read: Is CrowdStrike Worth Twice as Much as Symantec?).

With cybersecurity offerings slowing to a crawl, CrowdStrike is benefiting from pent-up demand and glowing reviews as a Silicon Valley unicorn. The company operates at the intersection of two extremely hot industries — cloud and cyber security — so the stock melt-up is hardly surprising. Naturally, there’s legitimate concern that these industries are not only overheated, but heading into bubble territory.

 

Conclusion

CrowdStrike still has a long way to go before it justifies its current price tag. The company’s recurring revenue growth — namely, subscriptions — are encouraging. More of the same is needed to ensure that the post-IPO mania translates into sustainable gains for shareholders.

Disclaimer: Author holds no investment position in CrowdStrike at the time of writing.