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DOW   35,911.81 (-0.56%)
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DOW   35,911.81 (-0.56%)

Why Crowdstrike (NASDAQ:CRWD) is a Monster Cybersecurity Stock

Wednesday, October 27, 2021 | Sean Sechler
Why Crowdstrike (NASDAQ:CRWD) is a Monster Cybersecurity Stock

 Innovative platform, high-profile partnerships, and explosive earnings growth make Crowdstrike a top cybersecurity play

It’s easy to recognize the growth potential in top cybersecurity stocks like Crowdstrike Holdings (NASDAQ: CRWD), as these companies are providing one of the most important services in the entire tech sector. With so many enterprises pursuing digital transformations, millions of workers handling their tasks remotely, and consumers of today dealing with most of their finances online, it’s safe to say that cyber threats are a concern that can impact everyone. The rise of cybercrime has led to plenty of new opportunities for businesses that can help to protect critical data from security compromises, and this trend should only continue in the coming years.

We’ve already witnessed several recent high-profile cyber attacks which have highlighted the importance of strong cybersecurity platforms, and with the global cybersecurity market size expected to grow at a CAGR of 10.9% from 2021 to 2028, there are plenty of reasons to be bullish on these stocks going forward. Crowdstrike stands out as a monster cybersecurity stock for several reasons, which is why it should be at the top of your shopping list if you are looking for exposure to the industry.

Let's take a deeper look at what makes this company a top cybersecurity play below. 

Leverages AI and the Cloud with its Falcon Platform

As technology continues to evolve, cybercriminals are getting more and more skilled at hacking into databases and wreaking havoc on companies with a lot at stake. That’s why so many businesses are turning to Crowdstrike to fortify their digital security. The company’s Falcon Platform relies on two proprietary technologies to protect workloads across an organization’s endpoints in a variety of environments, including on-premise, virtualized, and cloud. It leverages artificial intelligence and cloud computing technology to keep cyber threats at bay, which are two of the most exciting advances in technology today.

Falcon’s Lightweight Agent is easy for companies to deploy and consumes 1% or less of CPU while collecting data and events and correlating them with dynamic models to detect potential threats. The Threat Graph is another intriguing component of the Falcon Platform, as it provides an AI-powered dynamic threat database that continuously ingests and contextualizes real-time analytics by correlating across trillions of events. All of this fascinating technology is provided to Crowdstrike customers in a Software-as-a-Service subscription-based model, and the company can take advantage of lucrative cross-selling opportunities once a new client has been added.

Amazon Web Services Partnership & Strong Customer Growth

We know that Crowdstrike’s platform is innovative and unique, which has helped the company attract some very high-profile customers. Most recently, Crowdstrike announced new features on its platform that work with services from Amazon Web Services to protect customers from cyber-attacks. Since Amazon Web Services is the largest cloud infrastructure services provider by market share, it’s quite impressive that Crowdstrike’s Falcon Platform is helping to protect many of Amazon’s customers. This is exactly the type of partnership that investors should be excited about, and another reason why Crowdstrike is a top name in the industry.

Crowdstrike is also growing its customer base at a rapid pace, which jumped by 81% year-over-year in Q2. The company had over 13,000 customers as of July 31st, including 63 of the Fortune 100 and 234 of the Fortune 500. The accelerating client growth is great to see for a company that generates recurring revenue from each customer, and the fact that Crowdstrike’s platform appeals to businesses of any size in any industry means that it has a massive addressable market.

Explosive Earnings Growth Amidst Strong Cybersecurity Demand

When certain factors are at play that benefits an entire industry like we are currently seeing with cybersecurity, investors want to see a company take full advantage of the circumstances. That’s certainly the case for Crowdstrike, as the company has been delivering explosive earnings growth over the last few quarters. Crowdstrike reported revenue growth of 93% in FY 2020, revenue growth of 82% in FY 2021, and has already gotten off to a hot start in FY 2022.

In Q2, the company reported a record net new ARR of $151 million, grew ending ARR 70% year-over-year to exceed $1.34 billion, and added a record 1,670 net new subscription customers in the quarter. This is important as it confirms the company’s growth strategy is working well and that the demand for Crowdstrike’s products remains strong. The company also increased its forward guidance for the fiscal year 2022, which means that more good things are likely coming for investors in upcoming quarters thanks to such a favorable market environment.

Should you invest $1,000 in CrowdStrike right now?

Before you consider CrowdStrike, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and CrowdStrike wasn't on the list.

While CrowdStrike currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
CrowdStrike (CRWD)2.5$176.70+1.0%N/A-187.98Buy$282.96
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