Crowdstrike (NASDAQ:CRWD) Stock: Securing the Cloud and Growing Your Portfolio

Saturday, June 27, 2020 | Sean Sechler
Crowdstrike (NASDAQ:CRWD) Stock: Securing the Cloud and Growing Your Portfolio

All it takes is one successful cyberattack to cause significant damage to a company’s reputation for protecting its customer and its internal data. In today’s increasingly technology-dominated world, the ability to provide reliable cybersecurity services is becoming an essential service. This is one of the big reasons why Crowdstrike Holdings Inc (NASDAQ:CRWD) stock has been so hot and is trading near all-time highs.

Cloud computing is a rapidly growing market that investors clearly view as having huge potential. Thanks to that trend, finding a way to protect all of the data that is being uploaded into the cloud has become a major need for enterprises around the world. Crowdstrike offers endpoint security which protects every device that has access to a network. It’s compelling Falcon Platform is garnering a lot of positive buzz and the stock is worth a look for any growth portfolio. Here are some great reasons to put Crowdstrike on your watch list.

Innovative Protection

Most antivirus software solutions are designed to react to attacks after they happen. That’s why Crowdstrike is so innovative. By using cutting-edge technology such as artificial intelligence and machine learning, Crowdstrike’s platform is designed to predict cyber attacks and stop them in their tracks. With more and more enterprises transferring their data and operations into the cloud, this company is gaining more traction every day. Just think about all of the devices that are vulnerable to cyber threats. Laptops, desktops, IoT devices, servers, and virtual machines can all expose a company to digital attacks. Crowdstrike’s platform protects them all.

With a unique product that is disrupting the cybersecurity industry and making competing products like Norton Antivirus obsolete, Crowdstrike’s stock is soaring. The company is partnered up with some massive names including Amazon Inc’s Amazon Web Services, which led the company to a 75% quarterly increase in ARR (annual recurring revenue) just from that contract alone. It’s clear that this technology is useful, in demand, and changing the cybersecurity industry, which is why it’s a great company to add for the long-term.

Earnings Beat on Strong Growth

One of the big catalysts for Crowdstrike’s recent rally has to do with its resoundingly positive Q1 earnings report in which it reported its first quarterly profit ever. The company delivered 88% ARR growth and 105% subscription customer growth year over year as it helped more and more companies manage their cybersecurity in a rapidly changing tech-centric business world. The great thing about recurring revenue is that it makes it easier to predict a company’s future performance both operationally and financially.

The revenue for Crowdstrike in Q1 totaled $178.1 million, which was a year-over-year increase of 85%. It’s hard to say whether or not the revenue growth will continue at this pace, but it was without a doubt a very strong quarter for the company. What’s great about how Crowdstrike’s business model works is that they offer their clients upgrades and add-on modules to increase the annual income from each paid subscriber. Around 55% of Crowdstrike’s customers have purchased four or more modules. This cross-selling strategy bodes well for the company’s future, especially as businesses start to understand just how vulnerable they are when migrating their workloads into the cloud.

Current Trend is Crowdstrike’s Friend

It’s hard to deny the positive momentum that this stock has working in its favor. Businesses are quickly moving to the cloud to achieve better economies of scale and to allow their employees the ability to stay productive while working from home. This trend was already occurring prior to the pandemic and has accelerated even more in recent months. It’s safe to say that the company’s management is confident that this momentum will continue and upped its full-year guidance by 7%.

You can’t deny the technical momentum with Crowdstrike stock either, as the stock has risen from lows of $31.95 in March up 220% to touch all-time highs. The stock has been seeing massive accumulation after its earnings report, which likely means that institutional investors are scooping up shares. The fact that Crowdstrike has both technical and macro trends working in its favor make it absolutely worth a look for your portfolio.

Room to Run

We have seen some truly epic moves lately in the technology sector, and you can count Crowdstrike as one of the most impressive. If you are looking for a company that is poised to deliver strong growth in the next 3-5 years with room to run, Crowdstrike stock should definitely be on your shopping list. Just keep in mind that the NASDAQ and tech stocks are probably due for a significant pullback in the coming weeks, which might provide the perfect opportunity to pick up some shares on a dip.


7 Tech Stocks That Will Avoid Government Regulation

As if investing in the tech sector did not carry enough risk, there’s a new threat to the tech part of your portfolio. There is a growing sense that the United States Congress will seek to regulate some of the largest tech companies.

At this point, it looks like several of the FAANG stocks (Facebook, Amazon, Apple, Netflix, and Alphabet/Google) may be the initial targets. Some regulation, particularly regarding data security and privacy – not to mention censorship - would be welcome. But we all know it’s not likely to stop there.

What will more extreme regulation look like? If the most vocal members of Congress hold sway, some of these companies may get broken up or face utility-like regulation. From an investment standpoint, it just adds uncertainty.

The good news is that the tech sector encompasses many companies that are likely to avoid government regulation. With areas like cybersecurity, support for remote work, and mobile gaming to continue to pick up steam, there are other areas that can help boost your portfolio.

And in this special presentation, we’ll give you seven of our picks for tech stocks that will avoid government regulation.

View the "7 Tech Stocks That Will Avoid Government Regulation".


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
CrowdStrike (CRWD)2.0$262.99-0.5%N/A-365.26Buy$257.96
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