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My main narrative for CRWD:
· When founder and CEO George Kurtz founded CRWD in 2011, Cybersecurtiy Software, was nothing new, but with several pain points for customers: reduced system performance, updates needed to be installed, for each problem you needed a different software, so you dealt with silos, …
· So he build a fully cloud-based platform, named Falcon. It has a modular concept, and customer pays within an abo model only the contracted modules. At any time they may take modules in or out of scope. Highly flexible, and the changes are nearly instantaneously, because of the cloud native approach.
· The falcon suit already covers 20 different modules, and CRWD is very active in acquisitions, so the suit will be extended continuously, perfect for customers, because all modules are interconnected, so no silos anymore.
· In my option they have the perfect product, similar to Netflix.
· Same as Netflix, George Kurtz looks on the subsrcibtion rate by tracking ARR (Annual Recuring Revenue): Every quarter ARR grows by about 30%, actually ARR is $3,89B and the target for 01.2031 (FY2031) is $10B, ambitious, but I think they will reach it.
· Of course, we all know the July 19 Update disaster, which shut down PCs around the world with “blue screen”, but the popularity of Flacon suit is unchanged, we will see in the next report by a hopefully unchanged continuous growth in ARR.
I focus also on:
· More equity than debt. Ratio is at 25% (debt/equity). So perfect.
· A ROE of about 20%. Past 6%, future 29%. Impressive, because this young company had it’s breakeven to positive earnings in Q4.2023.
Actually it is 23% under fair value (FV $415), with a sporty underlaying FCF
· 2025: €1.100m
· 2028: €2.120m
Based on the underlaying FCF from SWS I calculated the interest rate of an investment at current stockprice. At current value I get 10% annual return. My money works well here.
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Disclaimer
The user Tokyo has a position in NasdaqGS:CRWD. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
