IPO Stocks To Watch: CrowdStrike Vs. Grocery Outlet

Do you have a set of rules for how to buy IPO stocks? Are you continuing to update your list of stocks to watch, especially during earnings season? Two new members of the IBD Breakout Stocks Index — CrowdStrike (CRWD) and Grocery Outlet (GO) — show why you want to make sure the answer to both of those questions is yes.

In their own way, CrowdStrike and Grocery Outlet provide two basic human needs…

security and food.

Based in Silicon Valley, CrowdStrike offers cybersecurity services to help detect threats and stop security breaches. Founded in 1946, Grocery Outlet just went public in June. It operates over 300 grocery stores, billing itself as “the nation’s largest extreme value retailer.”

But what about the growth prospects for these two new IPOs? While both stocks have gotten off to promising stock market debuts, will CrowdStrike and Grocery Outlet establish track records of solid and sustainable fundamental and technical performance?

IPO Stocks To Watch: CrowdStrike

CrowdStrike stock just joined the IBD Breakout Stocks Index, which gets updated every Tuesday after the stock market close. Following its June 12 IPO, the stock soon pulled back to form an IPO base, then gapped up to clear the 79.89 buy point on Friday.

The stock has so far continued to climb and is now extended beyond the buy range.

As is the case with many new IPOs, CrowdStrike is not yet profitable. But it has been posting explosive revenue growth. Over the last eight quarters, the cloud-based cybersecurity company has generated sales gains ranging from 77% to 194%. Analysts are looking for a 37% slowdown in revenue growth next quarter. The company has not announced the date of its next report.

CrowdStrike’s industry group, which includes CyberArk Software (CYBR), Fortinet (FTNT), Qualys (QLYS), and Palo Alto Networks (PANW), ranks No. 17 among the 197 industries IBD tracks.

While CrowdStrike hasn’t been trading long enough to establish an Accumulation/Distribution Rating, which requires a minimum of 13 weeks, it does sport a solid 2.4 up/down volume ratio. A score over 1.0 indicates demand for a stock.

IPO Stocks To Watch: Grocery Outlet

Given their low margins and typically relatively staid growth, grocery stores and supermarkets are not often among the fastest-growing stocks to watch. But with a different business model than many other purveyors of produce and packaged goods, Grocery Outlet is looking to be an exception.

Like CrowdStrike, Grocery Outlet is…

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