CrowdStrike earnings show strong cybersecurity demand despite market conditions – The Average Joe
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    CrowdStrike earnings show strong cybersecurity demand despite market conditions


    August 31, 2022

    Even in the current market environment, investors can count on hackers to continue hacking — and on cybersecurity companies to continue growing.

    CrowdStrike (NASDAQ:CRWD) is a world-class business in a growing industry with strong margins and consistent growth— even in the current environment.

    They provide cybersecurity services to some of the largest companies, including 69 Fortune 100 companies and 15 of the top 20 U.S. banks.

    • $CRWD is down 11% this year — outperforming the S&P 500 and NASDAQ100.
    • Since CrowdStrike went public in 2019, its stock has far outperformed the S&P 500 — up 215% compared to the S&P 500, up 45%.

    The company has consistently grown its sales over the years, with cash flow significantly improved from generating $12M in free cash flow in FY2020 — to $442M in FY2022.

    Earnings: This week, they reported earnings with the following highlights:

    • Losses are getting smaller: Lost $49.3M this quarter — down from $57.3M in the same quarter last year.
    • Sales continue to grow: Annual recurring revenue grew to $2.14B — up 59% from a year ago.

    They also gave next quarter sales guidance that was slightly ahead of analyst estimates.

    The company is trading close to its lowest valuation levels in years. With a 17x forward price-to-sales multiple, CrowdStrike is trading near its COVID lows of 13x — down from a high of ~48x in 2021.

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