CoreWeave (CRWV) Stock: Could the 8% Decline Be a Buying Opportunity Ahead of Earnings?

Posted on by

TLDR

  • CRWV declined more than 8% during Friday’s pre-market session following Morgan Stanley’s issuance of a Hold rating and $99 price objective
  • Top executive Brannin McBee divested approximately 133,330 shares on February 17, reducing his holdings by 29%
  • Blue Owl Capital was unable to obtain financing for a proposed data center transaction with CoreWeave
  • Fourth-quarter results are scheduled for February 26, with analysts projecting $1.53 billion in revenue, representing a 105% annual increase
  • The Street-wide consensus stands at “Moderate Buy” accompanied by a mean price target of $125.45

Shares of CoreWeave (CRWV) tumbled over 8% in Friday’s pre-market action, falling to approximately $90 from the previous close of $97.14.

CRWV Stock Card

Three factors converged simultaneously: Morgan Stanley’s Hold recommendation, substantial insider divestitures, and reports that Blue Owl Capital couldn’t finalize funding for an intended data center partnership.

analyst Keith Weiss initiated coverage with an “equal weight” designation and $99 price objective. He highlighted operational challenges within a constrained supply environment and noted the company’s difficulties fulfilling client demand—a matter that has already prompted legal action from certain investors.

Weiss indicated that Morgan Stanley would require evidence of active power capacity exceeding 850 megawatts, resolution of previous data center postponements, conversion of construction initiatives into actual capital expenditures, and a more diversified client roster before revising its assessment.

Insider Selling Raises Eyebrows

On February 17, senior executive Brannin McBee liquidated approximately 133,330 shares priced between $91.73 and $91.81 each, trimming his ownership position by roughly 29%. Regulatory filings show he retains 248,664 shares worth about $22.8 million.

These transactions occurred mere days ahead of the firm’s fourth-quarter earnings announcement, set for Thursday, February 26.

Analysts anticipate quarterly revenue of $1.53 billion, marking a 105% year-over-year surge. The projected adjusted loss per share stands at $0.50, improving from the prior year’s $0.80 deficit. Weiss observed that sentiment preceding the release is already elevated.

Nvidia has recently pledged a $2 billion agreement linked to developing more than 5 gigawatts of infrastructure by 2030, providing support for the optimistic outlook.

The Numbers Behind the Debate

CoreWeave maintains a disclosed backlog of approximately $55 billion, offering some forward-looking revenue clarity. However, this is offset by about $29 billion in outstanding debt and a current ratio of merely 0.49.

Deutsche Bank recently elevated its rating to Buy with a $140 objective. Nvidia’s most recent 13F disclosure revealed continued ownership in CoreWeave. The overall Street consensus registers as “Moderate Buy” based on 17 buy ratings, 12 hold ratings, and one sell recommendation.

Multiple securities fraud class-action suits have been lodged against the firm, introducing additional legal exposure.

The shares’ 50-day moving average stands at $86.50, while the 200-day moving average is $101.09. CRWV has gained approximately 142% during the last 12 months.