The market is voting, and CrowdStrike stock is the clear leader in the cybersecurity group.
"There is a lot of strength there," Irusha Peiris, portfolio manager at O'Neil Global Advisors, told Investor's Business Daily's "Investing with IBD" podcast. "There were a number of names out there that were doing well, and they all kind of fell by the wayside, right, where they all got hit."
But CrowdStrike stock has managed to stave off most of the damage. Compared with other stocks in its cybersecurity peer group, CrowdStrike stock is only 11% off its 52-week high. ZScaler and Palo Alto Networks are both more than 25% off their own 52-week highs. Rival SentinelOne is more than 24% off its 52-week high.
"It's had this amazing, amazing run," Peiris said of CrowdStrike. Is it setting up for another move?
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Driving CrowdStrike Stock's Performance
The cybersecurity leader can attribute its recent stock price performance in part to strong fundamentals. CrowdStrike's fourth-quarter earnings topped estimates. The company also beat a key growth metric, increasing its annual recurring revenue (a metric that tracks its subscription growth) by 34% to $3.44 billion, vs. a Wall Street estimate of $3.39 billion.
Investors initially cheered the news, sending the stock to an all-time high of 365 on March 6. However, the gain quickly faded, with shares closing well off highs of the day.
But rather than the action signaling a top, it could be more of a case of a stock that got too far ahead of itself too quickly.
Even with the fade, shares are up roughly 150% over the last year. Over the last few weeks, the stock has been tightening up with support at its key moving averages.
CrowdStrike has a Composite Rating of 98, according to IBD Research, and is ranked first in the Computer Software Security group.
CrowdStrike Stock Sees No Better Signal Than The Market
The chart hasn't flashed a clear buy signal just yet. "If you're waiting for a cup-with-handle or double bottom to buy CrowdStrike, you might be waiting a long time," IBD's Scott St. Clair told Investor's Business Daily's "Investing with IBD" podcast. "It's just one of those weird stocks."
Rather than trying to forecast where CrowdStrike will go next, investors can focus on it as a stock buoyed by market support as it leads its peers. CrowdStrike has an earnings line that's continuing to move nicely higher, and is top of its class in an industry that has more runway for growth.
"It's not me predicting that CrowdStrike is the leader in the group," said St. Clair. "All I'm doing is interpreting what's happening."
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