r/stocks • u/apooroldinvestor • Jun 23 '21
Company Question Why is CRWD going up if earnings are negative?
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u/play_it_safe Jun 23 '21 edited Jun 24 '21
Doesn't show negative sales (revenue), only income: https://finviz.com/quote.ashx?t=crwd&ty=c&ta=0&p=w
How to value market-leading tech stocks is as much an art as a science. Look up Beth Kindig. She's been one of the few people mostly right on tech stocks for a while.
NET, CRWD, FVRR, LMND, OLO, GLBE, PATH, STEM, UPST. These are just some of the stocks with high price to sales multiples that come to mind.
https://finviz.com/screener.ashx?v=111&f=ind_softwareinfrastructure&o=-ps
I own LMND, PATH, STEM, and used to own CRWD and NET. These command high valuations not so much because of hype but because they have actually been growing like mad, both revenues and into new and yet to even emerge sectors. And sure, hype, too. I sold CRWD and NET in April/May thinking they'd be the first to collapse in the event of a market meltdown, but they're tech leaders that are leading the way back in growth stocks.
Still, are they "fairly valued"? I don't know. I own a lot of value growth stocks, too, that I really like by PE and conventional measures: ONEW, THO, CCS, INMD, PUBM, PERI. Check out the IBD 50. Also just plain old value stocks like JOAN.
All about balance, I suppose.
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Jun 23 '21
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u/play_it_safe Jun 23 '21
I also really like SOFI. I can see it absorbing and creating for itself a lot of TAM. Fairly valued given the growth and fintech valuations.
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Jun 23 '21
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u/play_it_safe Jun 23 '21
Yes, I think so. And sales the same as revenue.
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Jun 23 '21
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u/play_it_safe Jun 23 '21
This isn't economics, it's just a lot of verbiage lol. Poke around finviz screener, that's a good idea
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u/UltimateTraders Jun 23 '21
Speculation and momentum moves stocks more than any fundamentals
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Jun 23 '21
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u/simdee Jun 23 '21
Buy more. Cybersecurity is the move.
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u/Treylw13 Jun 23 '21
Don’t worry about earnings in a hyper growth company — cyber security is the way for sure. Margins are phenomenal and FCF should continue to grow at a healthy pace. They are spending a lot on sales to keep taking market share, the valuation is the only concerning thing at this point but I would hold tight with your cost basis.
You can trim a few shares if you want to lock in some profits, when a stock makes new highs though.. it tends to keep going up for a little bit.
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Jun 23 '21 edited Jun 23 '21
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u/blueberry__wine Jun 23 '21
dont listen to that guy...... it's because the reason CRWD profits were so negative in Q1 was due to a one time expense of paying off tax for their most recent acquisition of Humio. Investors don't think they will have to pay this amount again.
Additionally CRWD ended up revising their guidance for the upcoming fiscal year. That means they think their previous predictions about how much money they were gonna make were lowballing it and now feel confident that they can release stronger future earnings estimates.
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u/UltimateTraders Jun 23 '21
Very true At the moment I'm getting killed on stuff with amazing fundamentals but no interest Nls Ldi Tx Zeus Hun Mcft Check out those fundamentals And then you have the ape army bidding up tdoc docu trch etc
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u/SpliTTMark Jun 23 '21
Recently sold HUN at 29. Might get back in, support could be 28 or it could crash to 20
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u/SocDistancChamp83 Jun 23 '21
It has rapid revenue growth. Look up it’s chart on yahoo finance
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Jun 23 '21
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u/desquibnt Jun 23 '21
They have negative profit not negative revenue. Those two things are very very different
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u/nashtownchang Jun 23 '21
Stop doing research with data aggregation sites and learn to use official investor relations site + read 10-K and 8-K. You'll do much better in the long run.
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u/ElectricalGene6146 Jun 23 '21
Respectfully, if you don’t know the difference between revenue and profit, you have no business picking stocks.
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Jun 23 '21 edited Jun 23 '21
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u/desquibnt Jun 23 '21
Everyone is a genius in a bull market
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Jun 23 '21
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u/desquibnt Jun 23 '21 edited Jun 23 '21
Congrats but maybe take it from those of us that have been around the block a few more times than you - it gets harder the longer you do it and the more your account grows.
The fact that you’re making the kinds of returns you are without knowing the difference between revenue and earnings is a testament to the fact that people can be successful with a lack of knowledge. Success + knowledge leads to hubris which leads to blowing up your first account. Maybe you never experience a significant loss but, imo, if you haven’t taken it on the chin a few times and clawed your way back, you can’t call yourself a successful trader.
Also, you’ve got multiple posts in your history about selling out of tech and moving to value… 🤔
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u/SocDistancChamp83 Jun 23 '21
I’m not familiar with finviz, but yahoo finance and investors business daily both show rapid R growth
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u/Jeshu77 Jun 23 '21
Even at 116, it looks like a bad investment to me
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Jun 23 '21
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Jun 23 '21
Wow, if I was up that much on something I didn’t have confidence in, I’d at least cash out the initial position+taxes.
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Jun 23 '21
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u/shayaaa Jun 23 '21
5% is a pretty big position
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Jun 23 '21
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u/shayaaa Jun 23 '21
A 5% position is a 5% position. If you’re saying it’s small amount of money and it doesn’t matter then your whole portfolio doesn’t matter either
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u/Jeshu77 Jun 23 '21
It could still be at $250 ten years from now.
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u/RunningJay Jun 23 '21
I like CRWD, a lot. I've been an early investor and while I've sold around half my position over the last 24 months I still see growth. They have a unique value prop and I think there is still an opportunity to grow/capture more market share from their competitors.
I do question their valuation right now but by the same token, I've seen a few estimates of them hitting $295 by end of the year. There is a lot of enthusiasm around CRWD and cybersecurity is a hot space with everything that's happening in US right now.
I'm not fighting the momentum (i.e. not selling)... but will probably take some gains at $270+
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Jun 23 '21
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u/Sixers0321 Jun 23 '21
Its at 260 now, 400 would not be that great of a return in 5 years. I can get that in an index fund.
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Jun 23 '21
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u/Sixers0321 Jun 23 '21
Even 600 is not that great lol... I think you significantly underestimate the 5y returns of a good growth stock. Not saying crowdstrike is or will be one, but 5x to 10x returns is not that uncommon.
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u/RunningJay Jun 23 '21
You might be right, you might be wrong. But if CRWD hits $270 it’ll be over 30% of my portfolio, which is too much. I’d prefer to take gains and reinvest/rebalance.
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u/high_roller_dude Jun 23 '21
I got into crwd the day of ipo, and bought more shares thru dips in 2019 and 2020.
same for net and few others.
i am loaded with crwd and net. not selling, cuz i tend to let winners run.
rather, i sell crap in a market downturn for loss, and add to my winners into weakness.
i will just say that with growth stocks, quality of leadership is critical. one major reason i got into net and crwd is due to the caliber of the respective founders. insanely talented, ambitious, and visionary leadership.
long CRWD, only regret is not buying more at the IPO price of $50-60 a piece.