The aging bull market has produced a casino atmosphere where fundamentals and logic have been thrown out of the window and extreme valuations have become the norm.
At $50/share, CRWD trades at a wildly expensive multiple of 23 times EV/revenue, which puts it in the top echelon of cybersecurity software valuations.
Profitability (GAAP-based) within a certain time frame is unknown, based on the company's reports.
The recent sector deals, the peers' valuation, the weaknesses and multiple headwinds, the significant losses and the unknown path to profitability create an ugly combo.
Due to this ugly combo, we believe that CRWD should currently trade less than 5 times its annual revenue, which translates into less than $20 per share.
A booming stock market during a cheap money era has boosted valuations for a bunch of Silicon Valley companies, which largely reminds us of the dot-com bubble in 1999. The thing is that venture capitalists