Grow With Crowdstrike
CrowdStrike (CRWD) is expensive by any metric, but so are other tech stocks like Nvidia (NVDA).
The trajectory of the stock still looks bright.
The cybersecurity company truly dishes out impressive growth numbers.
They are expected to grow sales by 39% over the next year and growth remains voluminous with no headwinds appear in the short term.
I’d be foolish not to mention one of the largest tailwinds in the tech sector in the form of defending and deterring digital malicious actors.
It’s real and capital is being allocated towards it.
The global cost of cybercrime is expected to double by 2028.
Sporting a market capitalization of $68 billion, CrowdStrike would need annualized returns of 18% to reach the $1 trillion club by 2040.
What do they mainly do?
Sifting through trillions of data points every week, CrowdStrike's single-agent, cloud-based cybersecurity platform grows more robust for each additional customer that joins its platform.
Quickly expanding its solutions from focusing primarily on endpoint protection (think laptops, printers, and servers) to becoming a complete security platform, CrowdStrike has grown from three security modules in 2016 to 27 today.
Each module provides a unique security solution and can be added by customers to fit their specific needs - all by relying upon just one agent, CrowdStrike's Falcon platform. The average number of agents on an endpoint today is 13 or more, so CrowdStrike's platform offers much-needed vendor consolidation for businesses looking to simplify their operations.
CrowdStrike is gradually becoming a one-stop shop for businesses' cybersecurity needs. Its growth potential and optionality seem almost boundless as it releases new modules tailor-made for its customers' desires. Look no further than two of its recent module advancements, each highlighting the company's ongoing shift toward becoming a complete security platform:
Falcon ID: CrowdStrike's identity protection and detection modules could become the company's next massive growth outlet. With 80% of global attacks stemming from exploited IDs, sales for these solutions grew from $7 million in annual recurring revenue (ARR) in Q3 of 2021 to over $200 million in Q2 of 2024.
Falcon Cloud: Bolstered by its recent acquisition of Bionic, which focuses on identifying and protecting items in the cloud, CrowdStrike now offers a complete cloud security solution. Growing its ARR from $106 million in Q4 of 2022 to nearly $300 million today, this cloud unit operates in a market expected to be worth over $32 billion by 2028.
Crowdstrike also landed an eight-figure deal from the federal government in its latest quarter. It counts less than 1% of the public sector as customers, so deals like this ignite a juicy channel of new revenue.
Thanks partly to its land-and-expand business model, CrowdStrike sees increasing profit margins for each additional module it sells to existing clients and each new customer it adds.
Who doesn’t like accelerating revenue and hypergrowth?
That’s what you get from CRWD.
The stock has been in overdrive pushing to new heights so I wouldn’t chase it right here.
It was only 365 days ago that the stock was at $101 and just touched $283.
That extraordinary rise is not the norm but is common with hyper-growth stocks.
It’s time to take the foot off the pedal and wait for a large dip which I do believe we will get.
That will be the next buying opportunity around $240 per share for CRWD.
