Takeaways
- CrowdStrike raised its forecasts for subscription gross margin and operating margin as demand for cybersecurity increases.
- The company said the growing use of AI will increase the need for cyber protections.
- Stocks were initially up on the news, then fell after Cisco Systems bought rival Splunk.
CrowdStrike Holdings (CRWD) upgraded its gross margin outlook to subscription and operating margin over the next three to five years as demand for protections against cyberattacks increases.
During a presentation at Fal. Company consultant CrowdStrike said it was targeting subscription gross margin of 82% to 85%, up 400 basis points (bps) from its previous forecast. Its operating margin target of 28% to 32% is 900 basis points higher than its previous forecast.
Co-founder and CEO George Kurtz said generative artificial intelligence (AI) will bring major changes to the cyber threat landscape and that CrowdStrike can help provide customers with what they need to protect their businesses. He noted that the company is constantly improving its Falcon Unified Security Platform to meet this challenge, announcing updates to the system and saying: “The reason we built the Falcon platform is just for the moment. »
Following the presentation, analysts from Truist, Barclays, Needham and Rosenblatt have all raised their price targets on the stock.
CrowdStrike shares have #39;s first made headlines, but then lost ground and was down 2% as of midday Eastern time after Cisco Systems (CSCO) bought rival Splunk (SPLK). However, shares have remained more than 50% higher this year. ;
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Source: investopedia.com