Crowdstrike Stock Hit by Broad-Market Headwinds Despite Bull Notes

The equity remains up over 160% year-to-date, however

Digital Content Manager
Sep 3, 2020 at 11:32 AM
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Crowdstrike Holdings Inc (NASDAQ: CRWD) entered the earnings confessional after the close yesterday, and hit the results out of the park. The cybersecurity company reported better-than-expected adjusted second-quarter profits of 3 cents per share on $198.97 million revenue, compared to Wall Street's estimated losses of 1 cent per share on $188.54 million revenue. As a result, the security received at least 13 price-target hikes this morning, including one from UBS to $163 from $140. Nonetheless, CRWD  is down 8.3% at $130.35 amid the broad-market tech pullback today.

Just yesterday, the shares jumped to an all-time-high of $153.10. And even amid today's sudden pullback, CRWD's ascending 10 day-moving average is in place to contain any further pullbacks. Nevertheless, Crowdstrike stock has more than more than quadrupled off its March 17 record lows near $32, and sports a jaw-dropping 160% year-to-date lead.

Analysts were already optimistic towards CRWD coming into today, with 15 of the 18 in coverage sporting a "buy" or better rating, and only three carrying a tepid "hold." Plus, the stock's 12-month consensus price target of $144.9 is a 11.8% premium to its current perch.

Short sellers finally have something to cheer about, despite landing on the short-sale restricted list (SSR) today. Short interest is down 12.7% in the past two reporting periods, yet the 8.4 million shares sold short make up 40.5% of Crowdstrike stock's available float.

Puts have been popular in the options pits lately. The security sports a 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 87th percentile of its annual range. This suggests a healthier-than-usual appetite for bearish bets of late.

As for today, options activity is ramped up. So far, 61,000 calls and 54,000 puts traded, the latter of which is eight times the average intraday amount. Most popular is the September 130 put, followed closely by the September 175 call, with new positions being opened at both. 

Lastly, the stock's Schaeffer's Volatility Scorecard (SVS) sits high at 77 out of 100. This means CRWD has tended to exceed option traders' volatility expectations during the past year -- a boon for option buyers.


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