The Growing Importance of The Cybersecurity Sector In Light Of The Russian-Ukraine War

Cyberattacks have long been a constant threat to the users of modern technology, and the likelihood of cyberattacks becoming modern warfare is high, as cyber weapons are viable tools that can easily disrupt a nation’s power supply, electrical grid, and food supplies without any military interference. Russia’s full-scale invasion of Ukraine presents the world with the most serious cyber threat it has ever faced.

The war between Russia and Ukraine stalled the global economy’s recovery from the worst of two years of pandemic-related instability. Russia invaded Ukraine more than a week ago, shocking the world and putting financial systems, security alliances, and global trade under pressure.

Uncertainty and growing fear over Russia’s invasion, as well as heightened market anxiety following the announcement from the United States, NATO nations, and allied countries of several economic sanctions on Russia, have impacted financial markets in the United States and other countries.

The Ukrainian crisis has escalated into a major conflict, and global companies, particularly those in sensitive and technology industries, may expect increased risks. Although the sanctions have a direct impact on Europe since it is a significant buyer of Russian energy exports, it would be naive to assume that Russia will not try to create a negative impact on other countries, particularly the United States.

The conflict with Russia and the introduction of broad sanctions will have a significant impact on the global technology industry, particularly smaller companies, which will almost surely be targeted as the war’s “weak spot.”

Despite the form of attack being unknown, cyber threats such as Advanced Persistent Threats (APTs), Malware, Ransomware, DDoS, Brute-force attacks, Zero-Day vulnerabilities, Code flaw vulnerabilities, Privilege escalation, Data anomalies, Network anomalies, and others have been warned about by cybersecurity agencies. Multiple Ukrainian governments and bank websites were claimed to have been damaged by a cyber-attack a week before the war began.

Over 48 hours following the invasion, suspected Russian-sourced cyber-attacks increased by over 800%. Last month, the U.S. Cybersecurity and Infrastructure Security Agency (CISA), the FBI, and the Department of Homeland Security issued a warning of the risk of Russian cyberattacks spilling over onto U.S. networks. The European Central Bank (ECB) also warned European financial institutions of the risk of Russian cyberattacks in the event of sanctions.

As cyber warfare has become an important instrument in the current global military arsenal, every enterprise, regardless of size, must move quickly to defend its information technology infrastructures. In his 2021 speech, President Biden warned that cyber-attacks might lead to a “real shooting war.”

The comments highlight the intensity of cyberattacks in the past few years, which have been connected to sources in China, Russia, Iran, and ISIS-affiliated groups. Cyber threats to nations and infrastructure are on the rise, and businesses are finding themselves on the front lines of this international conflict to not only guard themselves but also the country.

The cybersecurity threat is real

In 2017, the devastating ‘NotPetya’ cyber-attack, which was blamed on Russia, damaged sectors of Ukraine’s infrastructure and took down thousands of systems in many nations. The United States estimated total losses from the NotPetya hack to be north of $10 billion, with A.P. Moeller-Maersk, one of the world’s largest shipping corporations, losing roughly $300 million.

76 ports throughout the world were affected by the attack, including those in the Netherlands, Spain, and Los Angeles, and more than 4,000 servers, 45,000 personal computers, and 2,500 applications had to be immediately reinstalled.

In February 2022, there were 83 data breaches and cyber-attacks, accounting for 5,127,241 breached records, according to IT Governance UK. The department noticed a wave of security incidents in the closing days of February that were either directly or indirectly related to the Ukraine crisis. The discovery of “wiper” malware last week in Ukraine, which permanently deletes data on infected systems, has intensified a rush by businesses to strengthen their defences in case it spreads to other countries.

Microsoft‘s Threat Intelligence Center (MSTIC) also discovered offensive and destructive cyberattacks directed against Ukraine’s digital infrastructure several hours before the military attack began on February 24. In addition, the known criminal ransomware group, which was responsible for a major attack on Ireland’s healthcare system last year, claimed that it was offering the Russian government “full assistance” and would use its resources to “strike back at an enemy’s important infrastructures.”

The growth of Russian-based companies or companies with any kind of Russian connection that has a significant market share within the U.S. or Russian software firms that generate a major share revenue from products and services in the U.S., EMEA, and Asia, can also result in an increase in cyber threats.

Evan Koronewski, a Canadian columnist and political journalist, said, “Russia has significant cyber capabilities and a demonstrated history of using them irresponsibly.” As cyber warfare is intensifying, governments urged critical infrastructure groups such as financial institutions, pipelines, aviation, and electricity companies to prepare for the possibility of attacks from Russia.

With the motto “shields up,” the U.S. Cybersecurity and Infrastructure Security Agency also warned of consequences for the nation’s vital infrastructure, asking U.S. corporations to strengthen their infrastructure security. Companies must strengthen their cybersecurity resilience by updating systems, enabling multifactor authentication, and backing up data, according to the National Cyber Security Centre (NCSC) in the United Kingdom. The Canadian government is also providing cyber support to Ukraine including intelligence sharing, cyber security, and cyber operations.

The cybersecurity sector seems primed for growth

Organizations preparing for potential cyberattacks have recently expressed interest in the sector, and the increased geopolitical interest is expected to put upward pressure on cyber budgets. In 2021, France launched a cyber strategy with a total investment value of €1 billion, including €720 million in public funding, to triple the industry’s turnover from €7.3 billion to €25 billion, double the number of jobs in the sector from 37,000 to 75,000, and create three French cybersecurity unicorns.

The proposed budget of U.S. President Joe Biden includes $9.8 billion for all civilian cybersecurity activities, nearly half of which is devoted to protecting and improving federal IT systems and networks. On March 02, Governor DeSantis of Florida announced $20 million in funding to create and expand cybersecurity and IT training opportunities while also emphasizing that the global shortage of cybersecurity professionals is anticipated to be over 2.7 million, with approximately 22,000 cybersecurity-related jobs vacant in Florida.

According to ReportLinker, the Global Cyber Security Services Market size is expected to reach $178 billion by 2027, rising at a compounded annual growth rate (CAGR) of 9. 8 percent.

Even if the Ukraine conflict subsides, the importance of cyber-security will not diminish. This sector’s growth will be fuelled by the migration to hybrid or fully remote work options. The work shift that began in 2020 in response to public health emergencies is projected to continue in 2022 and coming years. Post-pandemic, many business owners have decided to either stay a remote-first company or transition to a hybrid model, with remote work as part of their corporate culture.

According to a study by Ladders Inc., by the end of 2022, one-fourth of professional roles, largely in the United States, will be remote, up 18% from the end of 2021, implying that more than 20 million jobs will not be returning to the office in the post-pandemic world. Because of the present hybrid work environment, employees will be connecting personal laptops to the corporate network, creating an opening for cybercriminals.

Home offices are less secure than corporate offices that are centralized with more secure firewalls and managed by IT professionals. As a result, focusing on the security problems of distributed workforces is a critical cyber security trend.

Furthermore, the growing Internet of Things (IoT) concept and the increasing number of businesses migrating to the cloud for the ease of scaling, adapting, managing, and automating activities will result in an increase in cybercrime risks. By 2026, there will be 64 billion IoT devices installed around the world, driven primarily by the shift to remote work.

Figure 1: Cyber-attack threat scenarios and potential worst-case impact on businesses worldwide in 2021, by category

Source: Statista

The demand for cybersecurity will only grow as more devices and computers become connected to the Internet. The use of AI and machine learning is going to boost the market growth of cybersecurity providers while increasing the demand for intelligent security software solutions, data protection, and cost-effective data management services.

AI has played a critical role in the development of advanced, automated security systems and autonomous threat detection, as it allows for the analysis of large amounts of data at a much faster rate, which benefits both large companies dealing with massive amounts of data and small and mid-sized businesses with limited resources. The revenue in the Cybersecurity market is projected to reach $146.3 billion in 2022.

Figure 2: Cybersecurity market revenue by segment

Source: Statista

This favourable outlook for the cybersecurity industry will help companies in this sector grow exponentially in the coming years, and it would be reasonable to expect a stellar stock market performance from this sector in the coming years.

Companies to look out for

Wall Street stocks have fallen following Russia’s invasion of Ukraine, but this catastrophic event has boosted cybersecurity stocks as investors have become concerned that the conflict could lead to a significant number of cyber threats. So far in 2022, the cyber-security sector has outperformed the software industry, with analysts expecting increased spending on security-related services as businesses and companies prepare for cyber warfare amid a rush to build cyber defences.

Since February 23, a day before the Russian invasion, the First Trust NASDAQ Cybersecurity ETF has gained 10.6 percent, while the ETFMG Prime Cyber Security ETF has gained 9.5 percent. The demand for cybersecurity is growing as the adoption of digitization and technological advancements necessitate securing critical information, networks, and programmes from digital threats. The majority of cyber-attacks aim to gain access to or harm sensitive data.

Cybercrime has progressed in line with technological advancements, making cyber-security deployment more difficult. Russia’s RT and Sputnik accounts were recently blocked by Alphabet Inc.’s Google (GOOG), Microsoft Corporation (MSFT), and other tech companies, preventing Russian official media from utilising and propagating falsehoods.

Companies like NortonLifeLock Inc. (NLOK) and CrowdStrike (CRWD) are anticipated to witness increased revenue as a result of the ongoing conflict. Hub Cyber Security Israel Ltd (HUB), a computing solutions provider based in Israel, is also reinventing cyber security with quantum-powered confidential computing.

The company aims to protect sensitive commercial and government information operating through three segments including Consulting Software, Training, and Software Testing and Outsourcing. Hub Security recently signed a strategic alliance with Getronics, a global ICT integrator, in December 2021 to provide secure compute protection to banks and organisations in the EU, Latin America, and the Asia Pacific.

Cybersecurity stocks are likely to continue to outperform other software stocks with investors betting the demand for these products will remain at elevated levels as a result of fears that cyber warfare will spread to computers around the world, as well as policymakers’ efforts to strengthen IT systems and networks.

Conclusion

Cybersecurity has long-term benefits, and it’s more important than ever to identify threats, secure resources over different networks, protect data when it’s delivered to partners and customers, be ready to safely recover when things go wrong, and ensure operations remain unaffected in the face of adversity.

Cybersecurity is essential for businesses, especially for critical infrastructure providers, and its importance is growing, with escalating the Russia-Ukraine conflict. For months, intelligence services have warned that Russia’s assault on Ukraine would be backed by cyberattacks, including repeats of infrastructure attacks that made businesses invest more in their infrastructure security.

Preview: What To Expect From CrowdStrike’s Q4 Earnings

The cloud-based security software company CrowdStrike is expected to deliver a loss of $16 cents per share in the fourth quarter, worse compared to a loss of $8 cents per share registered in the same period a year ago.

However, the Sunnyvale, California-based technology firm would post revenue growth of over 55% to $412.3 million. The company forecasts revenues in the range of $406.5 million-$412.3 million for the period ended January 31, 2022. The company has beaten earnings estimates only once in the last four quarters.

“We believe CrowdStrike remains strongly positioned to take advantage of the shift toward cloud-based security solutions from legacy vendors, a heightened threat environment requiring professional assistance, the adoption of zero-trust architecture, and organizations looking for platform-based security solutions,” noted Mark Cash, Senior Equity Analyst at Morningstar.

CrowdStrike stock closed 6.3% lower at $179.01 on Friday. The stock plunged more than 12% so far this year after falling over 3% in 2021.

Analyst Comments

“Arising overall security demand has driven higher expectations for CrowdStrike (CRWD). However, we see risk to investor expectations in Q4 as growth in customer adds is unlikely to outpace a declining average deal size by wide enough margin, resulting in more limited upside to consensus ARR forecasts,” noted Hamza Fodderwala, equity analyst at Morgan Stanley.

CrowdStrike has quickly risen to market leadership as a next-gen SaaS security platform with rapid share gains driving 95% revenue CAGR over the last 3 years. However, growing signs of increased competitive & pricing pressure is likely to make share gains more difficult going forward as topline growth decelerates on tough compares into 2022. Given this dynamic, we see an unfavourable risk-reward.”

CrowdStrike Stock Price Forecast

Sixteen analysts who offered stock ratings for CrowdStrike in the last three months forecast the average price in 12 months of $258.69 with a high forecast of $340.00 and a low forecast of $180.00.

The average price target represents a 44.50% change from the last price of $179.03. Of those 16 analysts, 15 rated “Buy”, none rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $180 with a high of $249 under a bull scenario and $123 under the worst-case scenario. The investment bank gave an “Underweight” rating on the cybersecurity technology company’s stock.

Several analysts have also updated their stock outlook. Stifel cut the price objective to $250 from $285. RBC lowered the target price to $250 from $275. Mizuho slashed the target price to $270 from $310. Truist Securities lowered the target price to $275 from $300.

“Fundamentals & a robust environment should drive both prints. CRWD should exceed F4Q cons ARR growth of 60% (Jeff 61%), & we believe low 60s%+ is the true bogey,” noted Brent Thill, equity analyst at Jefferies.

SentinelOne (S) should exceed cons in its 3rd Q as a public company sustaining at least 120%+ ARR growth vs cons. 116% yoy. While both warrant premium valuation, we view CRWD as more attractive given its scale & 28% discount to S (S does screen better on a growth adjusted basis but is not yet profitable).”

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong selling opportunity.

Check out FX Empire’s earnings calendar

A Divergence Between S&P 500 and the Stock Market Breadth May Signal a Market Top

SPX Daily Chart

Based on the comparison between the Percentage of stocks above 200-Day average and the SPX for the past 10 years, the divergence happened since Feb 2021 as the SPX continue to trend higher, the number of stocks participated in the uptrend is getting lesser, deteriorated from 90% to 42% as of last Friday since Feb 2021.

In fact, many growth stocks such as Affirm Holdings (AFRM), CrowdStrike Holdings (CRWD), Fiverr International (FVRR), MercadoLibre (MELI), Sea (SE), Twilio (TWLO), DocuSign (DOCU), Roku (ROKU), PayPal Holdings (PYPL), etc…experienced big drawdowns range from 32%-65% from their all time high.

There are only a handful of outperforming stocks like Apple (AAPL), Microsoft (MSFT), Lam Research (LRCX), Broadcom (AVGO), Qualcomm (QCOM), etc… supporting the S&P 500 index.

The divergence between the SPX and the stock market breadth are certainly not a healthy sign for the bull market especially it has been persisting for nearly 10 months. It might only take a few early capitulations from the funds to trigger a broad market sell-off when the market is at the vulnerable point.

It can be noticed from the chart that 50% level is a support. When the percentage of stocks above 200-Day average dropped below 50%, there was a relatively sharp sell-off in SPX, as highlighted in orange color in 2011, 2014, 2015 and 2018. The market breadth is often acted as a leading indicator before the damage hits the SPX.

Current Market Outlook on S&P 500

S&P 500 did have a rally after an oversold condition at the support area while there was presence of demand as pointed in last week’s article. Detailed analysis can be found by watching the price volume analysis for the market outlook on YouTube.

As shown in the screenshot on 8 Dec from my private Telegram Group for Mastering Price Action Trading course above, the four US major indices – S&P 500 (SPX), Dow Jones (DJI), Nasdaq (IXIC) and Russell 2000 (RUT) are likely in a consolidation with high volatility to both sides.

It is obvious that there was an increase of supply on the down wave since Black Friday selloff, which is yet to be tested. As S&P 500 approaches the resistance zone at 4700, it could be vulnerable for a correction when the sellers step in to lock in profit or initiate short positions. Should a correction happen, the previous swing low near 4500 is a natural area for buyers to step in for bargain hunting.

It is critical to judge the supply level together with the characteristics of the price action (spread and velocity) to anticipate next move. For a bearish scenario, watch out for a Wyckoff up thrust (false breakout) with increasing supply followed by a break below 4650. For bullish case, S&P 500 needs to commit above the resistance level at 4720.

Based on the market breadth and the Wyckoff phase analysis on SPX, a trading range between 4500-4700 is expected. There could be other headwind ahead such as Fed’s tapering of the bond-buying program and an urgency for interest rate hike, which I will be discussing in my weekly live session on Sunday. Click here to visit TradePrecise.com to get your weekly market insights straight to your inbox for free.

What Do Traders Have to Know About Inflation?

And a world where Covid concerns were moving into the rear-view mirror is now back out in front of us with more unknowns regarding the new South African variant.

Federal Reserve

Federal Reserve Chair Jerome Powell signals a more hawkish stance amid the relentless climb in U.S. inflation. Given the current economic backdrop, Powell told the Senate Banking Committee that it would be appropriate to speed up its asset “taper” process. That, in turn, implies that the Fed could begin lifting interest rates sooner than Wall Street has been anticipating, with some analysts thinking two or even three rate hikes could be on the table for 2022.

Powell also said it was time to “retire” the use of the word “transitory” to describe inflation as he admitted that the “risk of higher inflation has increased.” A decision on the Fed’s taper schedule will be made at its December 14-15 policy meeting, which Powell noted will be influenced by upcoming readings on employment and inflation.

Data to watch

These include the November Employment Situation due out this Friday, December 3, and the Consumer Price Index coming up on December 10. Powell’s change in tone on the inflation front comes as investors are still struggling to understand what, if any, threat the new Omicron Covid variant might pose to the economic recovery.

One of the top concerns is how another outbreak or wave might impact the labor market and the global supply chain. The worry is that the new risk could sideline more workers, in turn forcing employers to raise pay ever higher and fanning the inflation flames to even greater heights.

This sort of dynamic is sometimes called a “wage-spiral,” when rapidly rising wages lead to rapidly increasing demand, causing the cost of goods to rise, leading to demands for higher wages, etc., creating a seemingly endless “spiral” upward.

In theory, it works much like the type of inflationary bubbles that many see stemming from excessive government stimulus and/or excess money supply. Of course, there is very little that researchers do know about Omicron at the moment, so speculation about worst-case scenarios is likely running high. With the Fed now seeming to be headed toward an earlier end to its supports, the landscape ahead looks dramatically different than what it did just last week.

It makes sense that some investors may choose to lock in gains, bank profits and step to the sidelines until the storm clouds pass.

Today, Powell will be back on Capitol Hill for the second day of testimony, though he’s not likely to cover any new ground.

In economic data, ADP’s private payroll report for November is expected to show a gain of +525,000, a slight dip from October but in line with what’s expected in Friday’s official jobs report.

Some Wall Street insiders are worried that if job gains come in much higher than anticipated, it could harm stock prices as it would give the Fed justification to end its supports even quicker.

Other data today includes ISM Manufacturing, Construction Spending, and the Fed’s Beige Book.

On the earnings front, CrowdStrike, Snowflake, and Stellantis are today’s highlights.

Many US stocks valuations are priced to perfection, and all of a sudden, we are in a place with a lot of uncertainty as the Fed tries to turn their giant ship around, and the new Covid variant could create some added wrinkles.

CrowdStrike Stock Through The Lens Of Big Money

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And CrowdStrike has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the stock is trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares the last year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals CRWD has made the last year.

The last few days have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Chart, histogramDescription automatically generated
Source: www.mapsignals.com

In 2021, the stock has attracted 11 Big Money buy signals. And just as impressive, there’ve been zero sell signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • YTD outperformance vs. technology ETF (+11.21% vs. XLK)

Outperformance is huge for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, CrowdStrike has been growing revenues and earnings rapidly. Take a look:

  • 3-year sales growth rate (+94.9%)
  • 3-year earnings growth rate (+14.07%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, CrowdStrike has been a top-rated stock at my research firm, MAPsignals, earlier this year. That means the stock had buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

CRWD has a lot of qualities that are attracting Big Money. And since it first appeared on this report back on 12/29/2020, it’s up 37. The blue bar below shows the 1 time that CrowdStrike was a top pick:

Chart, histogram

Description automatically generated

Source: www.mapsignals.com

It’s a newcomer to the MAPsignals process. I wouldn’t be surprised if CRWD makes additional appearances in the years to come. Let’s tie this all together.

CrowdStrike continues to fire on all cylinders technically alongside growing sales and earnings. I like the long-term story of the stock.

The Bottom Line

The CrowdStrike rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no position in CRWD at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

Today’s Market Wrap Up and a Glimpse Into Wednesday

Stocks extended their gains on Tuesday, with the S&P 500 and Nasdaq finding their way back to record ground. The Nasdaq is now hovering above the 15K threshold. The Dow Jones Industrial Average also finished the day in the green. The S&P 500 is up about 19% year-to-date.

Investors are feeling optimistic now that the FDA has formally approved Pfizer’s COVID-19 vaccine. If a greater percentage of the U.S. population gets vaccinated, it would likely bode well for the economy.  Plus the spread of the delta variant is beginning to show signs of weakening.

Wall Street expects the bulls to stay in control for the rest of the year. Wells Fargo strategist Chris Harvey raised his S&P 500 year-end forecast from 3,850 to 4,825, according to CNBC.

The oil price was also higher on the day, rising more than 3% to hover above the USD 71 threshold once again.

Stocks to Watch

  • Shares of electronics retailer Best Buy soared 8% on the day after the company’s top and bottom-line results surpassed Wall Street estimates. The company also lifted its full-year revenue forecast amid strengthening demand for its products and a return to in-store shopping.
  • Cybersecurity firm Crowdstrike Holdings saw its shares climb 8% higher after the stock made its way onto the Nasdaq 100 index.
  • Shares of Shanghai-based e-commerce giant JD.com skyrocketed 14% higher on Tuesday on the heels of a 26% jump in Q2 sales to USD 39 billion. The company expects to get through the Chinese government’s tech crackdown unscathed, unlike its competitor Alibaba, whose revenues took a hit as a result.
  • GameStop saw its value balloon by more than one-quarter on the day on solid volume as retail investors made bullish bets.
  • Shares of clothing retailer Urban Outfitters fell 5% in after-hours trading even though the company’s Q2 earnings and revenue results beat analysts’ estimates.

Look Ahead

Durable goods orders for the month of July will be released on Wednesday. Wells Fargo economists predict that there was a decline of 1.2% amid “a slowing in transportation orders.” Excluding transportation, they forecast a modest increase of 0.5%.

All eyes are on the Fed’s upcoming Jackson Hole economic summit on Friday, the theme of which is “Macroeconomic Policy in an Uneven Economy” and which will be held virtually this year.

CrowdStrike Shares Fall Despite Earnings Beat and Lifted Guidance

CrowdStrike Holdings, Inc. (CRWD) shares retreated 6.42% in after-hours trade Wednesday despite the cloud-based security software company reporting better-than-expected quarterly results and lifting its outlook for the current quarter amid businesses rushing to secure their systems as more staff work remotely during the pandemic.

The Sunnyvale, California-based technology firm reported second-quarter (Q2) adjusted earnings of 3 cents per share, with the figure topping the consensus forecast by 200% and improving from EPS of -18 cents in the year-ago quarter. Revenues of $198.97 million also came in ahead of Wall Street forecasts and grew 84% from a year earlier.

The company’s CEO George Kurtz told investors that recurring subscriptions and ongoing demand for security software underpinned recent growth. “CrowdStrike’s strong momentum continued into the second quarter with net new ARR reaching a new record and exceeding $100 million. A favorable competitive environment and strong secular tailwinds are fueling our growth,” he said in a statement accompanying the earnings call.

Through Wednesday’s close, CrowdStrike stock has a market capitalization of $30.69 billion and trades up a massive 185% year to date (YTD). In the past three months alone, the shares have added over 50%.

Raised Outlook

The company also lifted its fiscal 2021 top- and bottom-line outlook. It now expects to earn between 2 and 8 cents a share, up from its previous forecast of a projected loss between 5 and 8 cents per share. On the revenue front, CrowdStrike sees sales of $809.1 million to $826.7 million, higher than its previous expected range of $761.2 million to $772.6 million.

Management sees increasing demand for its products in the quarters ahead, believing that security breaches will impact businesses more severely in the current environment due to economic vulnerability caused by the pandemic.

Wall Street Outlook

Before the company disclosed its Q2 earnings, Barclays analyst Saket Kalia raised the bank’s price target on Crowdstrike Holdings to $130 from $114, while maintaining his Overweight rating based on reoccurring revenue upside potential. Analysts elsewhere also remain bullish on the stock. It receives 17 ‘Buy’ ratings and 5 ‘Hold’ ratings. No research firm currently recommends selling the shares.

Technical Outlook and Trading Tactics

CrowdStrike shares rose to a new all-time high (ATH) yesterday before closing the session lower as profit-takers moved in. Selling looks like continuing on Thursday, with after-hours trade indicating a fall to around $133 on the open.

Traders should consider buying deeper pullbacks to the $120 level, where previous resistance should now act as support. Before committing capital, consider waiting for signs of a reversal in this area, such as the formation of a hammer candlestick pattern, to confirm the uptrend has resumed. Limit downside by placing a stop-loss order somewhere below the 50-day simple moving average (SMA).