Why CrowdStrike Stock Can Continue To Soar Higher


With a number of new partnerships lined up and its revenue growing at a fast clip, CrowdStrike (NASDAQ:CRWD) stock remains a best-in-class cybersecurity stock.

A sign with the Crowdstrike (CRWD) company logo
Source: VDB Photos / Shutterstock.com

CRWD stock continues its outperformance in October with the share price up 10% in the last 30 days Year-to-date, CrowdStrike is one of the top-performing technology and cybersecurity stocks having risen 34%. Not only does cybersecurity remain a top-of-mind issue in both the public and private sectors, but CrowdStrike continues to be the leading solution provider in the endpoint security market.

And despite its big run, analysts continue to see upside in CrowdStrike’s stock with the average price target currently set at $311.50, which would be roughly 10% higher than where the shares are sitting at now.

Big Partners

Much of the positive buzz around CrowdStrike is due to the partnerships that the Sunnyvale, California-based company has lined up in recent months. Specifically, CrowdStrike announced the “CrowdXDR Alliance,” a coalition of security and information technology organizations that includes partners such as Google parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), as well as Okta (NASDAQ:OKTA) and ServiceNow (NYSE:NOW), to name only a few of the heavy hitters.

The organizations involved in the partnership are aiming to develop a common language for data sharing between security tools and processes. A single, common language will unify different endpoint, cloud, and network security tools and provide greater visibility of security vulnerabilities, risks and defenses. Furthermore, it will establish and support a standardized responses to cybersecurity threats and breaches. Given the pedigree of the tech firms involved in CrowdStrike’s alliance, this could be a game changer for the industry.

CrowdStrike has also been making targeted acquisitions this year, announcing that it has completed a $392 million purchase of Humio, a leading provider of high-performance cloud log management and observability technology. To date, CrowdStrike’s has taken a careful approach to acquisitions, making a few targeted purchases when opportunities present themselves. Analysts have praised the approach as prudent and beneficial to the company’s bottom line.

Strong Growth and Financials

CrowdStrike is also benefiting from spectacular growth that is the envy of the business world. The company’s revenue surged 93% in fiscal 2020, gained 82% in fiscal 2021, and increased an annualized 70% in the first half of its current 2022 fiscal year. The company has forecast that its revenue for full year 2022 will grow between 59% and 61%.

In 2019, before the pandemic, CrowdStrike had 2,500 subscription customers. Today its subscriptions exceed 13,000. And nearly two-thirds of its current customers have adopted four or more of its cloud-based modules. Perhaps best of all, CrowdStrike turned profitable in the first half of its current 2022 fiscal year.

CrowdStrike’s torrid growth is expected to continue unabated given that it is the market leader in endpoint cybersecurity, a sector that has a total addressable market that’s forecast to grow 20% to $43.6 billion in 2023 from $36.5 billion today. CrowdStrike also boasts nearly half of the Fortune 500 companies as current customers, which helps burnish its reputation and bolster its marketing. More high-profile companies can be expected to come into CrowdStrike’s fold as well-publicized cyberattacks on America’s energy grid and food supply have driven home the importance of guarding against online attacks.

The Biden administration has made cybersecurity one of its key priorities, with the President himself hosting a summit on the issue with top technology leaders in late August. The meeting concluded with leading technology companies pledging to do more to protect the U.S. from online threats, especially the ransomware attacks that have hobbled several key sectors of the economy.

Ride The Momentum In CRWD Stock

CrowdStrike’s stock has enjoyed a fantastic bull run this year, with more gains likely in coming months. With the company now profitable, a market leading position secured, and number of key partnerships in place, CrowdStrike is doing all the right things to thrive both now and into the future. The company’s muscular growth and financial position have earned the confidence of Wall Street and the respect of industry peers. And as governments at all levels, as well as private sector companies, prioritize cybersecurity solutions, CrowdStrike will continue to soar.

CRWD stock is a buy.

On the date of publication, Joel Baglole held a long position in GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2021/10/why-crowdstrike-stock-can-continue-to-soar-higher/.

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