It’s Hard Not To Like CrowdStrike Stock at This Point
To say the world changed in the last 12 months is a massive understatement. How we think about things is fundamentally different, thanks to the coronavirus pandemic. It’s those changes, however, that create new investing opportunities, such as one that exists today with CrowdStrike (NASDAQ:CRWD) stock.
Since Covid-19 was declared a global pandemic in March 2020, the internet became a much more essential part of our daily lives. In seemingly the blink of an eye, white-collar work moved online because employees were barred from their offices.
Retail outlets began to beef up their online presences. Schools were operating with virtual classrooms, and the field of digital payments exploded.
Suddenly nearly any job, profession, trade or retail outlet that could operate online was doing so.
Taken together, all of this created a fundamental change in how we go about our daily lives, and it forever changed the way that we rely on the internet.
So, is it any wonder that I recently singled out CrowdStrike as one of my top cybersecurity stocks?
CRWD Stock at a Glance
CrowdStrike is a California-based cybersecurity company that offers cloud-based endpoint security solutions. Simply put, the company protects business and enterprise companies from data theft and cyberattacks.
A year ago, CrowdStrike was at $33, in those rocky early days of the novel coronavirus pandemic. But it has since rallied hard, becoming one of the best stocks in all of 2020. It closed the year at $211.
CRWD stock has had an up-and-down 2021. At one point it was up 14%, and soon after it was down 15% on a year-to-date basis. But CrowdStrike successfully bounced of a YTD low of $179 and is headed upward once again.
CrowdStrike is expected to report results for its fiscal 2021 fourth quarter and the full fiscal year on March 16. If they’re anything like Q3, investors should be pretty happy.
In the third quarter, CrowdStrike posted revenue of $232.46 million, which beat Wall Street’s estimates of $213.5 million. Earnings per share came in at 8 cents.
The report was a solid improvement from Q3 of fiscal 2020, when CrowdStrike reported revenue of $125.12 million and an EPS loss of 7 cents per share.
For the fiscal fourth quarter, CrowdStrike posted guidance of $855 million to $860 million in revenue, and EPS of 21 to 22 cents. That’s a bold prediction considering that Wall Street is only looking for EPS of 6 cents, and revenue of $819.96 million.
Cybersecurity Is a Growing Business
CrowdStrike’s success is in its rapidly growing business. CrowdStrike says that its customer base as of October 2020 grew by 85% on a year-over-year basis.
Some of that came from the company’s successful acquisition of Preempt Security, an access control and threat prevention startup. CrowdStrike bought the company for $96 million with the idea that it will help protect customers’ data while at the same time protect against insider threats and identity-based attacks.
And CrowdStrike remains in growth mode. Earlier this month, it announced it is buying Humio, a cloud log management and technology company, for $392 million in stock and cash.
The Humio deal will allow CrowdStrike to correlate data from any log or application, and then to offer real-time security.
CRWD stock’s improving financial picture makes such deals possible. As of Oct. 31, CrowdStrike had $1.06 billion in cash and short-term investments. And just as importantly, the company was carrying no long-term debt.
The Bottom Line
Cybersecurity companies aren’t as sexy and exciting as the latest thing Elon Musk is hawking, shiny SPAC deals or companies that want to shoot civilians into outer space.
That’s fine. Not every investment has to be sparkly and fun.
But you’d better believe that cybersecurity stocks are going to be increasingly important. We are conducting our businesses online and going to school online. We’re banking and investing online. We’re buying and selling online.
Every single one of those activities present opportunities for cybercriminals to try to hack into a system and steal identities, bank accounts or trade secrets. And those threats will increase over time.
CRWD stock is a solid play on a company that is working to keep our online lives safe and secure. When you consider the growth of this company, the fact that it has no long-term debt and that it’s in a growing field, then there’s a lot to like about CrowdStrike.
CRWD stock has an ‘A’ grade and a strong buy recommendation in my Portfolio Grader.
On the date of publication, Louis Navellier held a position in CRWD stock. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.
