Apps & Software

Earnings Previews: CrowdStrike, Snowflake, Splunk

Paul Ausick

Published: November 30, 2021 11:22 am

Three firms we covered in earlier previews reported earnings results before markets opened Thursday. Solar cell and module maker JinkoSolar missed on revenues but beat profit estimates, while social media platform Hello World (aka, Momo) beat on both. Apparel retailer Chico’s FAS also beat on both. All three traded lower, however, shortly after Tuesday’s opening bell.

After markets close Tuesday, Hewlett Packard Enterprise and Salesforce.com will report earnings. We did not preview any of the handful of companies scheduled to report results Wednesday morning.

Here’s a look at three companies set to report quarterly results after markets close Wednesday.

CrowdStrike

Cloud security platform maker CrowdStrike Holdings Inc. (NASDAQ: CRWD) has seen its share price rise by about 50% over the past 12 months. The stock rose by around 15% in the month of October, but an analyst downgrade in mid-November sent the stock by more than 16%. Increased competition and added pricing pressure were the stated reasons for the rating change. Investors might want to keep an eye on margins to see whether the downgrades worked out as predicted.

Overall, analysts are solidly bullish on the stock. Of 29 brokerages covering the firm, 19 rate the shares a Buy and five more have Strong Buy ratings. Another three have rated the shares at Hold. At a recent price of around $226.30 a share, the upside potential based on a median price target of $310 is 37%. At the high price target of $360, the upside potential is 59%.

Third-quarter fiscal 2022 revenue is forecast at $364.19 million, which would be up 7.9% sequentially and 56.7% higher year over year. Adjusted earnings per share (EPS) are forecast at $10, down 10.5% sequentially but up 25% year over year. For the full fiscal year ending in January, analysts expect CrowdStrike to report EPS of $0.47, up 72%, on sales of $1.4 billion, up nearly 61%.

CrowdStrike’s share price to earnings multiple for fiscal 2022 is 481.2. For fiscal 2023, the multiple to estimated EPS of $0.81 is 277.5, and for 2024, it is 165.2 times estimated EPS of $1.36. The stock’s 52-week range is $138.24 to $298.48. CrowdStrike does not pay a dividend. Total shareholder return for the past year is 46.2%.

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Snowflake

After sinking to a 12-month low nearly 45% below its price last November, shares of Snowflake Inc. (NYSE: SNOW) recovered to show a gain of more than 22% in mid-November. The data cloud platform got pushed down in the general sell-off of tech stocks over the past two weeks and finished the past 12 months up about 17%. What Snowflake may need to do to get its stock back on track is post a profit. Current estimates do not forecast a profit until fiscal 2024. That’s a long time in a short-attention-span market.
Analyst sentiment on Snowflake is positive if not strongly favorable. Of 29 brokerages covering the stock, 14 rate the shares a Hold, and the rest have a Buy or Strong Buy rating. At a share price of around $357.,50, the upside potential based on a median price target of $360 is less than 1%. At the high price target of $575, the upside potential is nearly 61%.

Fiscal third-quarter revenue is forecast at $306.13 million, up 12.5% sequentially and nearly double year over year. Snowflake is expected to post an adjusted loss per share of $0.06 in the quarter, worse than the $0.04 per share loss in the prior quarter but much better than the loss of $1.01 per share a year ago. For the full year, Snowflake is expected to post a loss of $0.26, much better than last year’s loss per share of $1.55, on sales of $1.15 billion, up nearly 94%.

Snowflake’s sales to enterprise value multiple for fiscal 2022 is 90.3. For fiscal 2023, the multiple to estimated sales of $1.88 billion is 55.0, and for 2024, it is 34.8 times estimated sales of $2.98 billion. The stock’s 52-week range is $184.71 to $429.00. CrowdStrike does not pay a dividend. Total shareholder return for the past year is 10.6%.

Splunk

A platform provider of real-time data collection and reporting, Splunk Inc. (NASDAQ: SPLK) has had a tough year. Over the past 12 months, the stock has dropped about 39%, including a decline of about 28% since former CEO Doug Merritt unexpectedly resigned earlier this month. That move more than offset a solid preliminary report on third-quarter results.

Splunk’s transition from a licensing model to a subscription model has weighed on revenue and bookings have been rising. Cathie Wood’s ARK Next Generation Internet ETF acquired more than 400,000 shares of Splunk stock in the September quarter and has added about 150,000 more since then.

Analysts are bullish on the stock, with 25 of 39 giving Splunk a Buy or Strong Buy rating and the rest rating the shares at Hold. At a share price of around $122.90, the upside potential based on a median price target of $180 is 46%. At the high price target of $225, the upside potential is 83%.

For the third quarter of fiscal 2022, Splunk is expected to post revenue of $646.52 million, up 6.7% sequentially and 15.7% year over year. The estimated adjusted loss per share is $0.53, better than the prior quarter’s loss of $0.62 but sharply below the year-ago quarterly loss of $0.07. For the full fiscal year ending in January, Splunk is expected to report a loss per share of $1.97, compared to last year’s loss of $0.55 per share, on sales of $2.58 billion, up 15.7%.

Splunk’s sales to enterprise value multiple for fiscal 2022 is 8.0. For fiscal 2023, the multiple to estimated sales of $3.11 billion is 6.6, and for 2024, it is 5.4 times estimated sales of $3.84 billion. The stock’s 52-week range is $110.28 to $207.41. Splunk does not pay a dividend. Total shareholder return for the past year is a negative 40%.

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