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Jump Into an Un-Crowded Trade with CrowdStrike

Many of today’s businesses count on CrowdStrike (NASDAQ:CRWD) to deliver software-as-a-service (SaaS) based, security endpoint solutions. It’s a great market sector to be involved with in the digital age, so it makes sense for investors to buy and hold CRWD stock.

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

As you may recall, the Colonial Pipeline hack from earlier this year reminded people of the importance of cybersecurity. It was an unfortunate incident, but it shone a spotlight on CrowdStrike as a first-call company in the cybersecurity software niche.

Nevertheless, CRWD stock is current out of favor on Wall Street. Given the stock’s recently bearish price action, you might be led to assume that CrowdStrike is having major problems.

However, I invite informed investors to check the facts before forming a conclusion. CrowdStrike’s demonstrated subscription customer growth, along with a value-added recent acquisition, should keep the skeptics and doubters at bay.

A Closer Look at CRWD Stock

In mid-December, possibly prompted by the Federal Reserve’s hints of upcoming interest-rate raises, the technology sector came under pressure.

It seems that CRWD stock may have suffered collateral damage as a result of this. Thus, on Dec. 17, the share price was below the key $200 level. Yet, that’s not necessarily bad news for investors. $200 has been a crucial support level throughout 2021 for this stock.

There’s also a resistance level at $290. Therefore, it’s possible to “play the range,” and buy CRWD stock near $200 and hold it until it reaches $290.

Just be aware that a support level isn’t a guarantee that the stock price will stay above that level. After all, the CrowdStrike share price did go as low as $168.67 within the past 12 months.

Revolutionary, Yet Simple

In the ongoing battle against cybersecurity threats, one of CrowdStrike’s most powerful tools is known as the Falcon. The CrowdStrike Falcon is an enterprise endpoint protection platform that’s powered by cloud-scale artificial intelligence (AI), running on the proprietary Threat Graph database and patented smart-filtering technology.

With a recent acquisition, CrowdStrike will be able to enhance the Falcon’s ability to enforce zero-trust network protection.

Specifically, CrowdStrike completed its acquisition of SecureCircle, a SaaS-based cybersecurity service that specializes in extending zero-trust security to data on, from and to the endpoint.

Among the key team members joining CrowdStrike are SecureCircle co-founder and CEO Jeff Capone, and co-founder and CTO Artem Tsai.

Integrating SecureCircle’s technology will allow us CrowdStrike to provide data protection by “enforcing frictionless Zero Trust control at multiple levels, all delivered through CrowdStrike’s lightweight Falcon agent on the endpoint,” according to CrowdStrike co-founder and CEO George Kurtz.

Broad-Based Strength

Turning to CrowdStrike’s financials, it’s notable that the company had a highly successful third fiscal quarter this year.

This indicates that there may be a disconnect between CRWD stock’s relatively low price point, and the company’s impressive recent financial performance.

During the company’s third quarter of fiscal-year 2022, CrowdStrike delivered a robust quarter with “broad-based strength across multiple areas of the business,” Kurtz observed.

In particular, Kurtz noted CrowdStrike’s “net new ARR [annual recurring revenue] growth accelerating and ending ARR growing 67% year-over-year to surpass the $1.5 billion milestone.”

Furthermore, CrowdStrike added over 1,600 net new subscription customers for the second consecutive quarter. Not only that, but the company had free cash flow of $123.5 million at the end of the quarter. Plus, CrowdStrike recorded a 63% year-over-year increase in revenues during 2022’s third fiscal quarter.

Bottom Line

Wall Street doesn’t seem to like technology stocks right now. Consequently, you can either follow the crowd, or invest in CrowdStrike.

With CRWD stock reaching a key support level – and as the company continues to deliver powerful revenue growth – we have a terrific contrarian investing opportunity right now with CrowdStrike.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarketsFinom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. 

Article printed from InvestorPlace Media, https://investorplace.com/2021/12/jump-into-an-un-crowded-cloud-protection-trade-with-crwd-stock/.

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