CrowdStrike Holdings (CRWD) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The upward trend in estimate revisions for this cloud-based security company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for CrowdStrike, as there has been strong agreement among the covering analysts in raising estimates.
Current-Quarter Estimate Revisions
The company is expected to earn $0.82 per share for the current quarter, which represents a year-over-year change of +74.47%.
Over the last 30 days, 11 estimates have moved higher for CrowdStrike compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 69.73%.
Current-Year Estimate Revisions
The company is expected to earn $2.92 per share for the full year, which represents a change of +89.61% from the prior-year number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, 13 estimates have moved up for CrowdStrike versus no negative revisions. This has pushed the consensus estimate 41.13% higher.
Favorable Zacks Rank
Thanks to promising estimate revisions, CrowdStrike currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
While strong estimate revisions for CrowdStrike have attracted decent investments and pushed the stock 27.1% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
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