FMP
CrowdStrike Joins S&P 500; Analysts Weigh In
Jun 11, 2024 4:46 AM - Parth Sanghvi
Image credit: Maxim Hopman
It's notable news that CrowdStrike will be included in the S&P 500 index starting June 21, reflecting the company's recent GAAP profitability and improved fundamentals. This move is part of the S&P 500's quarterly rebalancing and signifies CrowdStrike's enhanced performance, particularly in balancing growth and operating efficiency.
JPMorgan analysts view this inclusion positively, considering it a reflection of CrowdStrike's long-term quality improvement rather than a short-term catalyst. While the news is expected to prompt a temporary increase in CrowdStrike's stock price, analysts caution that the impact may be short-lived, with most of the price increase reverting by the actual inclusion date.
According to the Global Quantitative and Derivatives Strategy team, stocks like CrowdStrike could see an immediate gain of approximately 5.6% upon announcement of inclusion, but this increase tends to retract by the actual inclusion date when index tracking funds make their purchases.
In addition to CrowdStrike, private-equity firm KKR & Co and web host GoDaddy will also join the S&P 500 index at the market open on June 24. As of the latest premarket trading, CrowdStrike shares were up 5.2%, indicating positive market sentiment regarding the news.
Want to estimate the value of your investments based on expected future cash flows? Check out the Discounted Cash Flow (DCF) valuation API here.
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