Will Investing in CrowdStrike Stock, Rallying Cybersecurity Company, Secure Your Retirement?

Will Investing in CrowdStrike Stock, Rallying Cybersecurity Company, Secure Your Retirement? In this analysis, I will be going over why I think that it is the perfect time to invest in CrowdStrike (CRWD) the ultimate endpoint security. My investment ideology will be on the basis of its financials as well as major macro trends. I have made a similar pitch on Palo Alto Networks, if you want to analyze it, click here. Company Overview (NASDAQ: CRWD) CrowdStrike is a company operating in the cybersecurity sector. They emphasize their security products and services on a cloud-based network. Cloud-delivered solutions for endpoint and cloud workload protection is offered in the USA, Australia, Germany, India, Israel, Romania, and the UK. A Look at CrowdStrike Stocks Revenue The revenue stream consists of two entities, revenue from subscriptions and revenue from the professional services offered. Overall revenue has nearly doubled year on year from 2019 to 2021. The flowing revenues are $249,824, $481,413, $874,438 (in thousands of dollars) respectively. The reason why we can see this increase in revenue is due to two factors. When most companies took a bullet to the chest during the Covid correction, CrowdStrike thrived after covid. The first factor is the high volume of companies and employees moving to a digital platform of work rather than a physical level. Covid has forced many operations to cancel or shift to an online platform. Seeing the high volumes of network traffic also increased the enterprise spending on cloud and data centers. In 2020 alone, $89 billion were spent on data centers and $129.5 on cloud centers. The second factor is the sentiment and fear generated by the vulnerability of being attacked and having data stolen. Many large and small businesses are operating on a cloud platform which leaves them open to theft and attacks. For this reason, corporates want to secure their cloud platforms. The extremely high demand for this has been the cause of such high revenue growth. The cybersecurity sector’s CAGR is 11% which shows great prosperity for CrowdStrike as they are performing above the CAGR. Investment Thesis 1: Growing Cybersecurity Threats Create Strong Market Demand for CrowdStrike The first thesis addresses the fact that cybersecurity threats are greater than ever. The threats are harder to mitigate as they are ever-evolving, especially due to the increase of Malware attacks. For this reason, we can see the increase in the US national budget dedicated to cybersecurity services. From the span of 2006-2020, a total of 156 major cybersecurity attacks have been executed in the USA. One of the most infamous cases was that of the solar winds attack last year in which the data of 10 US agencies such as homeland, defence, the treasury was breached. After such events, Joe Biden has emphasized the importance of cybersecurity and has been taking measures to lower the chances of it happening again. Investment Thesis 2: Easy to Use Software And Integration Is Great for Client’s of CRWD The second thesis is based on the reliability and effectiveness of the falcon products made by CrowdStrike. In a very hyper fragmented industry, there are many pure-play competitors as well as big conglomerates. To survive in such an environment, it is essential to have great and effective products and services. CrowdStrike has developed a cloud-based platform, named “Falcon” which supports 19 cloud modules via SaaS subscription-based models. This platform is advantageous as it spans across multiple large markets such as g corporate workload security, security and vulnerability management, managed security services, IT operations management, threat intelligence services, identity protection and log management. The falcon platform is different from its competitors because of one important reason. The reason is it is easy to use, easy to maintain and extensible. The platform allows some thinly staffed security organizations to spend less time taking care of the product so they can focus on the bigger things. Having said this, the falcon platform is extremely beneficial to small-scale companies as they can spend less time worrying about security threats and maintenance, as the falcon can take care of itself. Risks and Mitigations As a cybersecurity provider, CrowdStrike continues to be a big target for cybersecurity attacks. If CrowdStrike ever undergoes an attack, its reputation and reliability will go to vain. To mitigate this risk, CrowdStrike has expended and is continuing to expend significant amounts and resources to prevent security breaches. Although eliminating the risk completely is highly unlikely due to organized criminals wide attacking platforms, anticipations and preparations are being done to tackle issues as they come. CrowdStrike is prone to interest rate risk. CrowdStrikes’ cash and cash equivalents consist of cash on hand and highly liquid investments in corporate debt securities and bank deposits. These large investments are exposed to market risk due to the fluctuating interest rates. To mitigate these risks, CrowdStrikes’ investment portfolio consists of short-term investments. Doing this will reduce the interest rate risks. Final Thoughts on Why You Should Consider CWRD Stock As An Investment Although many people think that this stock is overvalued and hyped up, it is still a great time to buy in. The way I look at it is not from a multiples or a ratios perspective. I look at the futuristic needs of big and small corporations, governments, and households. As the threat of cybersecurity attacks will only increase, if not exponentially, it is better to be prepared than to be attacked. The cybersecurity market is not fueled by how much a company is over or undervalued, rather it is fueled by sentiment. After any major attacks, demand always tends to increase. Based on the sentimentality of this market I think that now is the right time to buy into CrowdStrike. The longer we wait to invest, the longer we will regret not investing now. Sources CrowdStrike 10K Finviz Visualizations S&P Capital IQ Statista CrowdStrike Investor Relations

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Will Investing in CrowdStrike Stock, Rallying Cybersecurity Company, Secure Your Retirement?

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Will Investing in CrowdStrike Stock, Rallying Cybersecurity Company, Secure Your Retirement?

 

In this analysis, I will be going over why I think that it is the perfect time to invest in CrowdStrike (CRWD) the ultimate endpoint security. My investment ideology will be on the basis of its financials as well as major macro trends. I have made a similar pitch on Palo Alto Networks, if you want to analyze it, click here.

 

Company Overview (NASDAQ: CRWD)

CrowdStrike is a company operating in the cybersecurity sector. They emphasize their security products and services on a cloud-based network. Cloud-delivered solutions for endpoint and cloud workload protection is offered in the USA, Australia, Germany, India, Israel, Romania, and the UK.

 

A Look at CrowdStrike Stocks Revenue

The revenue stream consists of two entities, revenue from subscriptions and revenue from the professional services offered. Overall revenue has nearly doubled year on year from 2019 to 2021. The flowing revenues are $249,824, $481,413, $874,438 (in thousands of dollars) respectively. The reason why we can see this increase in revenue is due to two factors. When most companies took a bullet to the chest during the Covid correction, CrowdStrike thrived after covid.

  • The first factor is the high volume of companies and employees moving to a digital platform of work rather than a physical level. Covid has forced many operations to cancel or shift to an online platform. Seeing the high volumes of network traffic also increased the enterprise spending on cloud and data centers. In 2020 alone, $89 billion were spent on data centers and $129.5 on cloud centers.
  • The second factor is the sentiment and fear generated by the vulnerability of being attacked and having data stolen. Many large and small businesses are operating on a cloud platform which leaves them open to theft and attacks. For this reason, corporates want to secure their cloud platforms. The extremely high demand for this has been the cause of such high revenue growth.

 

The cybersecurity sector’s CAGR is 11% which shows great prosperity for CrowdStrike as they are performing above the CAGR.

 

Investment Thesis 1: Growing Cybersecurity Threats Create Strong Market Demand for CrowdStrike

The first thesis addresses the fact that cybersecurity threats are greater than ever. The threats are harder to mitigate as they are ever-evolving, especially due to the increase of Malware attacks. For this reason, we can see the increase in the US national budget dedicated to cybersecurity services.

 

 

From the span of 2006-2020, a total of 156 major cybersecurity attacks have been executed in the USA. One of the most infamous cases was that of the solar winds attack last year in which the data of 10 US agencies such as homeland, defence, the treasury was breached. After such events, Joe Biden has emphasized the importance of cybersecurity and has been taking measures to lower the chances of it happening again.

 

Investment Thesis 2: Easy to Use Software And Integration Is Great for Client’s of CRWD

The second thesis is based on the reliability and effectiveness of the falcon products made by CrowdStrike. In a very hyper fragmented industry, there are many pure-play competitors as well as big conglomerates. To survive in such an environment, it is essential to have great and effective products and services.

CrowdStrike has developed a cloud-based platform, named “Falcon” which supports 19 cloud modules via SaaS subscription-based models. This platform is advantageous as it spans across multiple large markets such as g corporate workload security, security and vulnerability management, managed security services, IT operations management, threat intelligence services, identity protection and log management.

The falcon platform is different from its competitors because of one important reason. The reason is it is easy to use, easy to maintain and extensible. The platform allows some thinly staffed security organizations to spend less time taking care of the product so they can focus on the bigger things. Having said this, the falcon platform is extremely beneficial to small-scale companies as they can spend less time worrying about security threats and maintenance, as the falcon can take care of itself.

 

Risks and Mitigations

As a cybersecurity provider, CrowdStrike continues to be a big target for cybersecurity attacks.

  • If CrowdStrike ever undergoes an attack, its reputation and reliability will go to vain. To mitigate this risk, CrowdStrike has expended and is continuing to expend significant amounts and resources to prevent security breaches. Although eliminating the risk completely is highly unlikely due to organized criminals wide attacking platforms, anticipations and preparations are being done to tackle issues as they come.

CrowdStrike is prone to interest rate risk.

  • CrowdStrikes’ cash and cash equivalents consist of cash on hand and highly liquid investments in corporate debt securities and bank deposits. These large investments are exposed to market risk due to the fluctuating interest rates. To mitigate these risks, CrowdStrikes’ investment portfolio consists of short-term investments. Doing this will reduce the interest rate risks.

 

Final Thoughts on Why You Should Consider CWRD Stock As An Investment

Although many people think that this stock is overvalued and hyped up, it is still a great time to buy in. The way I look at it is not from a multiples or a ratios perspective. I look at the futuristic needs of big and small corporations, governments, and households. As the threat of cybersecurity attacks will only increase, if not exponentially, it is better to be prepared than to be attacked. The cybersecurity market is not fueled by how much a company is over or undervalued, rather it is fueled by sentiment. After any major attacks, demand always tends to increase.

Based on the sentimentality of this market I think that now is the right time to buy into CrowdStrike. The longer we wait to invest, the longer we will regret not investing now.

 

Sources

 

 

 

 

 

 

 

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4 min

300.00

Target Price

10/ 10

Confidence

6-12 Months

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