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Crowdstrike’s shares sank 20% before the bell after the company forecast current-quarter revenue on Tuesday that fell short of analysts’ estimates, while peers Zscaler (NASDAQ:ZS) Inc, SentinelOne (NYSE:S) Inc and Palo Alto Networks (NASDAQ:PANW) Inc fell between 2.0% and 6.2%.
“Increased macroeconomic headwinds elongated sales cycles with smaller customers and caused some larger customers to pursue multi-phase subscription start dates,” Crowdstrike Chief Executive Officer George Kurtz said.
The results are the latest in a series of dour reports from cybersecurity firms, whose business boomed during the pandemic but is now seeing a slowdown, making them a hot target for private equity buyouts.
“Resilient, but not immune is a theme that will likely dominate the narrative during our October quarter-cohort earnings cycle,” Piper Sandler analysts said.
“Both Palo Alto Networks and now Crowdstrike have talked about macro weakness entering the picture on their earnings calls – sending a signal to brace for further potential weakness from other vendors in the space.”
Still, some analysts see long-term benefits from the rising demand for cybersecurity as more businesses take to the web and high-profile hacks force companies to be more cautious.
That, as well as year-to-date share drops of up to 69%, have made these companies buyout targets. In October, Vista Equity Partners agreed to take KnowBe4 Inc private in a $4.6 billion deal, while earlier this year Thoma Bravo said it would buy Ping Identity for $2.4 billion.
Graphic: Cyber security stocks fall in 2022 https://graphics.reuters.com/CYBERSECURITY-STOCKS/myvmonwbevr/Pasted%20image%201669806486529.png
