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CrowdStrike: Top Dog In Cybersecurity

Apr. 05, 2021 2:26 AM ETCrowdStrike Holdings, Inc. (CRWD)20 Comments
Star Investments profile picture
Star Investments


  • CrowdStrike is an innovator in cybersecurity.
  • The company has developed multiple moats to stave off competition from competitors.
  • There is a lot of optionality embedded within the Falcon platform to further increase the company's TAM.
  • CrowdStrike sells at a premium valuation of 30X FWD sales but that premium valuation seems deserved in comparison to peer companies.
  • The stock is currently a buy for aggressive growth investors.
Cyber Technology Security Protection Monitoring Concept, Advanced Cloud Data Security System, Futuristic Technology Background, 3d Rendering
Photo by Stock Depot/iStock via Getty Images

CrowdStrike (NASDAQ: NASDAQ:CRWD) is a cybersecurity company that provides a variety of toolsets for companies to safely manage any remote computing device that has the ability to connect to a corporate network. This is a service that has become increasingly important, as

This article was written by

Star Investments profile picture
I have been a Merchant Seaman that has traveled the world for over 30 years. Within the last 15 years, I developed a very intense interest in investing. I learned a lot of what I know about investing from The Motley Fool. Also because I have a engineering background, I often tend to gravitate to Tech stocks

Analyst’s Disclosure: I am/we are long CRWD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (20)

NET is better.
Isn’t CRWD’s forward P/S for next 12 months closer to 20, which isn’t that badly overvalued.
wsoyke profile picture
My view of CRWD.
Sure revenue growth is decelerating. That's different than revenue is decreasing. And the revenue growth is still market leading. Also the two mentioned acquisitions will add to revenues.
Beyond that, there's near hundred percent customer retention, and near 130 percent net $ retention rate, and increasing margins.
As for interest rates rising? CRWD doesn't need to borrow to run the business. And they are not diluting by selling new shares. So...
So, richly valued? Yes. Overvalued? Well, I thought the recent drop to low to mid 170's was about as low as we'd see, and added at $175. I doubt I'll have any regrets.
tbone profile picture
@wsoyke the risk from rising interest rates isn't so much in potentially rising borrowing costs, but an increase in the discount rate applied to future cash flows to arrive at an "intrinsic value"...
Don't forget Microsoft as a competitor. You think CRWD has lots of data, you should see what MSFT has.
Star Investments profile picture
@snowbrick The problem with Microsoft is they are not focused exclusively on security and have never been known to be great at security. Wasn't Microsoft Azure breached in the Solar Winds hack? Even though, that was not totally MSFT fault, it was not a good look.. www.zdnet.com/...
@Star Investments Why do they need to be focused solely on that as a company? They have tons of brilliant people that are focused on it 100% in their individual roles. They booked 10 billion in revenue on security products in 12 months. They're the ultimate target for attackers given their market share particularly in authentication. They're not without their faults but they're definitely a player here, particularly given some of the recent improvements to their security products.
Star Investments profile picture
@snowbrick Usually large companies like Amazon, Microsoft and Google attempt to lock as many customers into as many of their products as they can. For a variety of reasons, many customers prefer not to depend solely on a Google, Amazon or Microsoft.

For instance, Microsoft has identity products but Okta is still able to grow their identity business because Okta is viewed as a "neutral" platform. Why do many customers prefer "neutral" platforms? Well, it might be because a company like Microsoft, Google or Amazon might simply be a vendor today but a fierce competitor tomorrow, no matter what business that a company is in. Microsoft, Google and Amazon are increasingly diving into healthcare, clean energy, banking, insurance, travel, logistics, hardware manufacturing, etc.

Secondarily, Microsoft has never been known as being great with security.
Good review .
I always don’t understand the cyber security industry . Fastly said they have signal sciences , elastics has the end game programme . DT snd ddog also have their cyber security elements . Are they also end to end ?
Thank you for a nice article. Just wondering, why dont you compare with NET? Which one do you think is better?
Star Investments profile picture
@pmkri87 Cloudflare is mostly known as a CDN. Although, Cloudflare has a lot of security aspects, I just thought there were other companies that were a little more comparable. There are many companies that have security aspects and I just didn't want to include everything under the sun because the article would have become too unwieldy.
@pmkri87 NET is better.
Thank you! Well written.

Quite awhile back I closed my eyes and bought it because Crowdstrike was "native to the cloud", whereas the others were not. I am not sure what that even means, but the stock tripled and it is was as high as $240 btw...it atherefore lready has had a pullback of sorts. But it seems to be volatile.

I am confused by this market and would rather be lucky than smart. but knowledgeable is good..... what do they mean by cloud native?
"cloud native"

It is a native of the cloud - it was never a product designed to be installed on customer's equipment.
@Fundamental Trader
AHhh.. Thank you!
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