CrowdStrike stock price has surged to a record high, a year after the company’s bug caused a major outage affecting the biggest companies globally. CRWD soared to $491 on Tuesday, up by over 145% from its lowest point in 2024.
CrowdStrike surges a year after its outage
CrowStrike, one of the top companies in the cybersecurity industry, came into the spotlight on July 19 last year after a bug caused a major outage affecting companies like Delta Air Lines, American, KLM, Sky News, and Starbucks.
The CRWD stock price plunged after the outage, as investors predicted that it would lose customers and that its growth would slow. As we wrote at the time, the company’s business would not suffer substantial losses since all software companies often go through such outages.
CrowdStrike’s business has continued doing well, with its annual revenue jumping from over $844 million in 2021 to $4.136 billion in the trailing twelve months.
The company has thrived because of the rising demand for its artificial intelligence (AI) security solutions, which are estimated to have a total addressable market (TAM) of $250 billion by 2029.
The most recent results showed that the company’s growth continued in the last quarter. Its ending annual recurring revenue (ARR) rose to over $4.43 billion in the last quarter, bringing the quarterly revenue to $1.1 billion.
CrowdStrike is now focusing on profitability and growth. Its operating income stood at $201 million in the last quarter, while its free cash flow was $279 million. It hopes to move to GAAP profitability in the fourth quarter of this year.
Read more: CrowdStrike stock sinks as forecast disappoints and IT outage impact lingers
Growth to continue
Wall Street analysts believe that CrowdStrike’s business will continue doing well this year. The average estimate is that the revenue will grow by 19.3% in the current quarter to $1.15 billion. This estimate is slightly lower than the upper side of the management’s estimate.
The average revenue estimate by 50 Wall Street analysts is that its annual revenue will jump by 21% this year to $4.76 billion. It will then grow by 21.8% in 2025 to over $5.8 billion.
Further data shows that CrowdStrike’s earnings per share (EPS) will be $3.53 this year, down from $3.93 last year. This growth will then move to $4.73 next year.
A key concern among analysts is whether CrowdStrike’s $118 billion market valuation can be justified. This valuation metric gives it a forward non-GAAP P/E ratio of 135, higher than most companies.
The best approach to value a SaaS company is known as the rule-of-40, which focuses on growth and margins. In this case, the company has a forward revenue growth of 21% and a net income margin of minus 4.17%.
This gives it a rule-of-40 metric of 16.1%. When using the FCF margin, the company has a rule-of-40 metric of 52%.
CrowdStrike stock price forecast
The daily chart shows that the CRWD stock price has surged in the past few months, moving to a high of $491 this week. The stock has moved above the important support at $456, its highest point on February 18. It has invalidated the double-top point, a popular bearish view.
The MACD indicator has remained above the neutral point, while the Relative Strength Index (RSI) has moved above 50.
Therefore, the stock will likely continue rising as bulls target the key resistance level at $500. A move below the support at $456 will become invalidated if it moves below the support at $456.
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