CrowdStrike Holdings Inc. and Okta Inc. saw gains on Thursday, with each stock increasing by more than 10%. The reason for this market response was the better-than-expected quarterly results reported by both cybersecurity firms. Demand for their products drove the impressive performance.
CrowdStrike exceeded estimates in its report released on Wednesday. Their revenue experienced a 37% surge, reaching $731.6 million. Additionally, the company's adjusted net income doubled to $180 million in the quarter. This growth was primarily fueled by increased subscriptions to their cloud-based data and identity protection services. Furthermore, CrowdStrikes's third-quarter revenue and net income projections also surpassed expectations.
Okta also witnessed an increase in revenue, rising by 23% to $556 million due to subscription growth. The company announced that its net loss had narrowed to $111 million after the closing bell on Wednesday. These results were better than what Wall Street analysts had forecast, according to Refinitiv data.
Following these reports from CrowdStrike and Okta, shares of CrowdStrike reached as high as $164.41 on Thursday, marking a 10.2% increase from previous levels. Currently, the stock is trading at $162 with a gain of 8.59%. Year-to-date shares have soared impressively by over 54%.
Similarly benefiting from the sentiment surrounding cybersecurity firms, shares of Okta rose significantly as well. Up by 17.6% to reach $86.50. Which represents their highest level since May. Currently, the stock has increased by 13.5%, trading at $83.
Other companies within the cybersecurity sector also experienced movement in their stock prices due to the strong performance exhibited by both CrowdStrike and Okta.
Zscaler Inc. saw a 5% increase in its stock price, while the Nasdaq Cybersecurity index experienced a 1.5% rise.
Meanwhile, Palo Alto Networks Inc. witnessed a 2% surge in its shares on Thursday. This came after the company's stock skyrocketed by 15% in a session last week, alleviating concerns of a slowdown in the cybersecurity sector.
Following this news, several analysts raised their price targets for CrowdStrike and Okta. The median price target for CrowdStrike now is $180, while Oktas is $95.
CrowdStrike, headquartered in Austin, Texas, offers cloud-based cybersecurity protection through its Falcon platform, which prominent U.S. Companies widely utilize. On the other hand, San Francisco-based Okta predominantly provides identity protection and authentication services via its cloud network.