Shares of CrowdStrike (CRWD) reached a new record high of $351.47 on Friday, marking a 20% increase for the month and a 37.6% rise year-to-date, nearly triple the Nasdaq Composite’s gain of 12.7%. The company is set to report its fiscal Q1 earnings on June 4, with high expectations as its enterprise value is at 20.8 times the consensus revenue estimate for FY’25, which is expected to reach $3.97 billion. CrowdStrike has emerged as a leading security platform vendor in the cybersecurity industry that is transitioning from point solutions to comprehensive platforms.
CrowdStrike’s Falcon Platform comprises more than 20 cloud-based modules covering various security areas such as cloud workload protection, identity security, endpoint protection, and security analytics. The company offers customers a seamless platform experience with a single agent and interface, encouraging integration and efficiency. CEO George Kurtz has been critical of competitors’ platform strategies, emphasizing the importance of an integrated platform like the one provided by CrowdStrike. The company boasts strong platform adoption, with 64% of customers using five or more modules and increasing numbers of deals incorporating multiple modules.
In its latest earnings report, CrowdStrike saw significant growth in FQ4, with total revenue increasing by 33% to $845.3 million, surpassing expectations. Subscription revenue rose by 33% to $795.9 million, maintaining a 119% dollar-based net retention rate for the third consecutive quarter. Operating margin increased to 25%, and EPS exceeded consensus estimates by 13 cents. Additionally, total annual recurring revenue (ARR) grew by 34% to $3.435 billion, with a record $281.9 million of net new ARR added.
The company’s expansion is not limited to its core endpoint protection segment but also includes cloud security, identity protection, and next-generation SIEM (LogScale) businesses. In FQ4, these emerging products saw total ARR more than double year-over-year to over $850 million, with CrowdStrike outpacing other vendors in net new ARR in the cloud security sector. The company closed substantial deals, such as an 8-figure multi-year cloud security deal with an AI company and a 7-figure deal with a financial services company that replaced a competitor’s offering, resulting in significant cost savings.
On Wall Street, CrowdStrike’s price targets have been increasing, with Oppenheimer raising its target to $355, Morgan Stanley to $372, Barclays to $400, and RBC Capital to $420. Analysts point to the company’s robust platform adoption, execution capabilities, strong new product pipeline, and improving win rates as factors supporting these higher targets. For FQ1, CrowdStrike predicts revenue growth of 30% to 31%, with a consensus estimate around $904.6 million. The company also forecasts revenue growth of 28% to 31% for FY’25, highlighting its positive outlook for the future.
