CrowdStrike (CRWD) Soars 4.9%: Is Further Upside Left in the Stock?

CrowdStrike Holdings CRWD shares ended the last trading session 4.9% higher at $381.1. 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 22.6% loss over the past four weeks.

The optimism surrounding the stock can be attributed to CrowdStrike’s expansion of its identity security portfolio with the general availability of FalconID. The new solution extends the Falcon platform into phishing-resistant, zero-friction multi-factor authentication (MFA), helping customers defend against AI-driven phishing, credential abuse and MFA bypass attacks, which strengthens CrowdStrike’s position in the fast-growing identity and access management space.

This cloud-based security company is expected to post quarterly earnings of $1.10 per share in its upcoming report, which represents a year-over-year change of +6.8%. Revenues are expected to be $1.3 billion, up 22.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with 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 >>>>

CrowdStrike belongs to the Zacks Security industry. Another stock from the same industry, Okta OKTA, closed the last trading session 3.1% higher at $75.25. Over the past month, OKTA has returned -19.6%.

Okta's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.85. Compared to the company's year-ago EPS, this represents a change of +9%. Okta currently boasts a Zacks Rank of #1 (Strong Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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