Strength Seen in CrowdStrike (CRWD): Can Its 8.1% Jump Turn into More Strength?

CrowdStrike Holdings (NASDAQ:CRWD) CRWD shares ended the last trading session 8.1% higher at $265.63. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7.2% loss over the past four weeks.

The upswing came after Nasdaq announced late Monday that the cybersecurity firm would be included in the Nasdaq-100 Equal Weighted Index and the Nasdaq-100 Technology Index before the market opens on August 26.

CrowdStrike has been witnessing tremendous growth over the last one year as it is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches and increasing necessity for security and networking products amid the COVID-19 pandemic-led remote working trend. Continued digital transformation and cloud-migration strategies adopted by organizations are key growth drivers.

CrowdStrike’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth for the company.

This cloud-based security company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +200%. Revenues are expected to be $323.97 million, up 62.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For CrowdStrike, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CRWD going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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