Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

CrowdStrike: Gains to Resume Soon

Stock MarketsSep 12, 2021 11:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. CrowdStrike: Gains to Resume Soon

Crowdstrike (CRWD) is an American Cybersecurity company predominantly focusing on endpoint protection, threat intelligence, and cyberattack response services. I am bullish on the stock.

Stock Gains Recently Decelerated

After a year of exquisite growth, Crowdstrike's stock hit a snag over the recent month. The company blasted past earnings expectations, beating revenue by $14.16 million, but the stock lost 3.88% of its value that very day.

Investors should think long-term and not worry about temporary frictions. In Crowdstrike's case, it's just a matter of an overcooked valuation, but the rate at which earnings are growing means that it will be a temporary concern to investors. (See CrowdStrike stock charts on TipRanks)

Current Valuation Metrics

CrowdStrike's stock can be summarized by its PEG ratio, which measures company growth relative to stock price growth. A PEG of 1.00 means that the stock price is justified at historical growth rates. CrowdStrike is trading at a PEG ratio of 11.21, which is clearly out of range.

Yet when we consider the company's profitability & growth ratios along with a stagnant stock price, we could argue that matters are about to take a turn for the best.

We will start off with revenue. Total revenue increased by 70% year-over-year, with subscriptions accounting for more than half, with a 71% year-over-year increase for the segment. In addition, the company's ARR has grown 70% year over year, meaning that the sustainability of its earnings is growing exponentially.

Furthermore, Crowdstrike has an operating cash flow growth of 77.66%, subsequently translating into a cost of capital decrease of 7.1% (year-over-year). Furthermore, an increase in working capital of 56.48% ensures that the company has enough capital to expand without a share offering that might dilute shareholders.

Driving Factors Looking Forward

It's clear that growth in core business will justify higher valuations moving forward, but to provide substance to the bullish argument, I'd like to highlight its growth through acquisitions.

Tech stocks' growth can largely be attributed to acquisitions of value-added solutions from smaller companies.

Crowdstrike recently acquired Humio to fortify its detection and response capabilities. Prior to this, In September 2020 the company completed the acquisition of Preempt Security to add to the protection of identity theft and insider threats. Another significant acquisition is the Payload deal; CrowdStrike acquired Payload Security for its automated malware analysis systems catering to universities, governments, and enterprises.

These acquisitions haven't only strengthened CrowdStrike's data protection capabilities but also its customer base, which will most probably lead to further strength in earnings.

Wall Street's Take

Wall Street thinks the stock is a strong buy for the next 12 months. There are 19 Buy ratings, 1 Hold rating, and no Sell ratings, with Alex Henderson of Needham coming in with the highest price target of $140.

The average CrowdStrike price target is $314.90, implying an upside of 20.2%.

Disclosure: At the time of publication, Steve Gray Booyens did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.

CrowdStrike: Gains to Resume Soon

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email