CrowdStrike Trips Over Its Own Growth Story, Investors Immediately Panic Smash Sell Button…

“It’d be alot cooler if you did” - Crowdstrike Investors on revenue guidance

CrowdStrike just got body-checked by the one thing worse than hackers: disappointed Wall Street analysts. After months of riding the “cybersecurity immortality” bandwagon, CrowdStrike went and hit everyone with a limp bizkit Q2 revenue forecast… $1.14B to $1.15B, a hair below the $1.16B the Street demanded. In normal markets, that’s a bean counting rounding error, but for a company that was up nearly 40% YTD, it’s a full-blown mood killer. 

(Source: Giphy) 

Especially considering Q1 revenue landed exactly as expected at $1.10B, EPS beat at 73 cents, but the guidance faceplant hit harder than their blue screen of death bloodbath last year. Apparently government agencies and enterprise clients are suddenly allergic to signing big cybersecurity checks. Blame sticker shock from high interest rates, inflation that refuses to die, and… federal agencies being told to cut costs. According to William Blair, the government contract environment is shaping up to be a dumpster fire for the rest of 2025 and into next year.

(Source: Reuters) 

What’s more, and adding to the macro headwinds, CrowdStrike is also in a knife fight with Palo Alto Networks and Fortinet for whatever’s left of the IT budget. R&D, sales, admin… every cost bucket is trending up. Why? Because again, the company’s still cleaning up after last summer’s “broad software outage” mess, which will drag Q2 free cash flow down by $29 million. Meaning net loss for the quarter? $110.2M, compared to a $42.8M profit a year ago. Oh, and perhaps you’ve heard… but last month, they gutted 500 employees, about 5% of the workforce. 

But, but, but… good news, forget about the doom and gloom because CrowdStrike’s board wants you to focus on the $1 billion share buyback they just authorized. Why? Because the company is still growing revenue at nearly 20% year-over-year. And yet, while full-year EPS guidance actually got a modest bump ($3.44–$3.56 vs. $3.33–$3.45 prior), revenue targets remained unchanged… and pissed off everyone that was expecting an uptick. 

(Source: Giphy) 

Moral of the story? CrowdStrike finds itself exactly where every “must-own” growth stock lands after a reality check… punished for not being perfect, gawked at by competitors, and forced to buy back its own shares for comfort. Of course, in the land of the free and home of the AI havoc, Cybersecurity demand is still sky-high. However, if you’re not outgrowing the hype, you’re just another ticker that gets guillotined next. 

And that’s exactly what happened. Now obviously, price action could change course throughout the week. But with the stock getting pummeled -5.41% on the day, it’ll take a swath of degenerate “BTMFD” buyers to get out of the hole. Meaning, keep your eyes on CrowdStrike, and place your bets accordingly. Until next time, friends…

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Stocks.News does not hold positions in companies mentioned in the article.