CrowdStrike Setup 'Constructive,' But Truist Favors Rubrik, SailPoint Ahead Of Q2 Earnings

• Truist said cybersecurity spending remains resilient, but enterprise budgets are becoming more concentrated in specific areas.
• Identity security, cyber resilience, AI governance and data security are among the categories attracting more spending.
• Truist said Rubrik and SailPoint were its preferred cybersecurity names heading into earnings, citing their exposure to areas with stronger budget allocation.

Shares of CrowdStrike (CRWD), Rubrik (RBRK) and SailPoint (SAIL) dipped in pre-market trading on Wednesday amid broader market weakness, despite price hikes from Truist ahead of their earnings reports. 

Analyst Junaid Siddiqui raised CrowdStrike's price target to $245 from $187.50, while keeping a ‘Buy’ rating. Rubrik's target jumped to $135 from $90, and SailPoint's target rose to $23 from $18, both with ‘Buy’ ratings. All three moves came as part of an off-cycle software earnings preview.

RBRK stock fell as much as 1.3% in pre-market trade, but was among the top trending tickers on Stocktwits at the time of writing. Retail sentiment around the cloud management solutions provider remained in ‘bullish’ territory over the past day, accompanied by chatter at ‘high’ levels.

CRWD stock edged 0.4% lower in pre-market trade, with retail sentiment trending in the ‘bearish’ zone over the past day. SAIL stock traded flat and retail sentiment fell to ‘neutral’ from ‘bullish’ territory.

Cyber Spending Is Holding Up, But Not Evenly

According to Truist, cybersecurity spending remains resilient overall, calling the setup “constructive" for CrowdStrike heading into earnings. However, it noted that cyber budgets were becoming increasingly concentrated on identity security, cyber resilience, AI governance, data security, and platform consolidation, rather than being evenly distributed across the sector.

Truist pegged Rubrik and SailPoint as its preferred names going into earnings, saying both companies are positioned for "beat-and-raise quarters." 

Rubrik operates in data security and cyber resilience, while SailPoint focuses on identity security, two of the specific categories Truist says are pulling in a bigger share of enterprise cyber budgets right now. 

Earnings Will Test The Cybersecurity Spending Thesis

Over the past 12 months, SAIL has underperformed its two peers, falling over 5%, while RBRK stock gained more than 17% and CRWD stock nearly doubled. Truist’s updated targets suggest the firm sees additional upside in all three stocks, though the investment cases differ. 

CrowdStrike is scheduled to report earnings on August 26, with Wall Street expecting earnings per share (EPS) of $0.29 on revenue of $1.4 billion. Rubrik is scheduled to report its second-quarter earnings a day later, with consensus estimates forecasting EPS of $0.04 and revenue of $396 million.

SailPoint, which is scheduled to report its earnings next month, has Wall Street looking for $0.08 in EPS and $310 million in revenue. 

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