Shares of CrowdStrike fall after ‘disappointing’ earnings, Morgan Stanley says buy the dip

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3 years ago

November 30, 2022

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George Kurtz, chief executive officer of CrowdStrike Inc., speaks during the Montgomery Summit in Santa Monica, California, U.S., on Wednesday, March 4, 2020. The Montgomery Summit gathers entrepreneurs, investors, and executives to discover the most important innovations in business and technology.

Patrick T. Fallon | Bloomberg | Getty Images

CrowdStrike shares fell about 19% on Wednesday morning, a day after the cybersecurity company reported third-quarter results that said new revenue growth was weaker than expected.

CrowdStrike reported annual recurring revenue (ARR) of $2.34 billion, up 54% year over year. More than $198 million was net new ARR added in the quarter, which ended Oct. 31. The company also added 1,460 net new subscription customers for the quarter.

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CEO George Kurtz said in a release that the company’s total net new ARR was below expectations. Last year, CrowdStrike’s ARR increased by more than 67% in the third quarter, and the company added 1,607 net new subscription customers for that same period.

Analysts at Morgan Stanley also said CrowdStrike’s results were “disappointing,” but they said estimates did not reflect the current macroeconomic environment. They encouraged investors to buy the sell-off in a Wednesday note.

“With forward estimates appropriately level set, we think this pullback provides an attractive entry point to accumulate shares in a premier SaaS security franchise,” they said.

An analyst at Stifel said CrowdStrike’s results were “disappointing” and downgraded the stock from buy to hold.

“Although management’s preliminary CY24 outlook was below consensus, we believe it could take a few quarters until expectations are fully de-risked, and as a result, we lower our rating to Hold,” they wrote in a Tuesday note.

CrowdStrike’s stock is down more than 32% this year, and the analyst expects further downside ahead after the company issued light guidance. The analyst’s $120 price target, slashed from $225, is about 13% below where shares closed Tuesday.

Needham analysts said they remain a “convinced buyer” of CrowdStrike for the long term.

They believe the company’s slower guidance opened a “can of worms” about bear market concerns, but they said they think most of those concerns are “misplaced.”

“We suspect CRWD will find itself in the penalty box into year-end despite its strong growth, operating leverage and Cash Flow as investors worry about lengthening deal cycle time and potential for further deceleration,” they wrote Wednesday. “We remain positive on CRWD.”

—CNBC’s Michael Bloom contributed to this report.

Technology

Amazon had a very big week that could shape where its stagnant stock goes next

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1 hour ago

December 5, 2025

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Amazon had a very big week that could shape where its stagnant stock goes next

Technology

Meta acquiring AI wearable company Limitless

Published

2 hours ago

December 5, 2025

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Meta acquiring AI wearable company Limitless

Meta CEO Mark Zuckerberg wears the Meta Ray-Ban Display glasses, as he delivers a speech presenting the new line of smart glasses, during the Meta Connect event at the company’s headquarters in Menlo Park, California, U.S., Sept. 17, 2025.

Carlos Barria | Reuters

Meta is acquiring artificial intelligence wearable startup Limitless, the companies said Friday.

“We’re excited that Limitless will be joining Meta to help accelerate our work to build AI-enabled wearables,” a Meta spokesperson said in a statement.

Limitless makes a small, AI-powered pendant that can record conversations and generate summaries.

Limitless CEO Dan Siroker revealed the deal on Friday via a corporate blog post but did not disclose the financial terms.

“Meta recently announced a new vision to bring personal superintelligence to everyone and a key part of that vision is building incredible AI-enabled wearables,” Siroker said in the post and an accompanying video. “We share this vision and we’ll be joining Meta to help bring our shared vision to life.”

Salesforce shares pop 5%, continuing post-earnings rally and leaving stock poised for best week since 2023

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3 hours ago

December 5, 2025

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Salesforce shares pop 5%, continuing post-earnings rally and leaving stock poised for best week since 2023

Sheldon Cooper | Lightrocket | Getty Images

Salesforce shares popped 5% on Friday after the company posted better-than-expected third-quarter earnings on Wednesday despite falling short of Wall Street’s revenue estimates.

The stock, which is up 13% over the past five days, is aiming for its best week since 2023.

The company reported adjusted earnings per share of $3.25, topping Wall Street’s estimates of $2.86 per share. Revenue increased 8.6% year over year to $10.26 billion but just missed analyst projections of $10.27 billion.

Although the artificial intelligence boom has pushed several tech companies into record surges, cloud software firms have seen a rocky year as investors wonder whether AI will render the industry obsolete.

Salesforce is hoping to persuade Wall Street that AI will be able to bolster its products rather than replace them.

Investors “somehow think software companies are under arrest from AI, when the opposite is true,” Salesforce CEO Marc Benioff told CNBC’s Jim Cramer on Thursday.

During the third quarter, the company acquired startups Regrello and Waii, which uses AI to generate code with natural language instructions.

Despite Salesforce’s shares being down 21% year to date, compared with the Nasdaq’s 22% gain, analysts are more optimistic for 2026.

“CRM [Salesforce] continues to be levered to digital transformation, and we expect the company to grow at a solid rate going forward,” Mizuho analysts wrote. “At the same time, we believe CRM will remain fiscally disciplined and that it can continue to drive higher operating and FCF margins.”

Analysts highlighted Salesforce’s AI platform Agentforce, which builds agents that automate business tasks and streamline workflow.

Despite initial investor skepticism over the platform, Cantor analysts were encouraged by its strong adoption in the customer service space.

“We think CRM is starting to formalize and mature the strategy, which should make it easier for customers to understand, and therefore adopt, Agentforce,” the Cantor analysts wrote.

Annual recurring revenue of Agentforce jumped 330% year over year to $540 million.

“Why everyone is so excited about Agentforce is because this is what AI was meant to be,” Benioff said. “It brings together humans and data and AI and apps, and delivers an incredible experience for companies.”

WATCH: Salesforce CEO Marc Benioff goes one-on-one with Jim Cramer