Bull of the Day: CrowdStrike (CRWD)

CrowdStrike Company Overview

Zacks Rank #1 (Strong Buy) stock CrowdStrike (CRWD) is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services. If you have ever watched ABC’s “Shark Tank,” you probably know that, often, the best and most profitable companies are created to fix a problem. That’s precisely how CrowdStrike was born. CrowdStrike’s co-founders George Kurtz and Dmitri Alperovitch were inspired to create a cybersecurity company that addressed the shortcomings in the existing cybersecurity technologies.

CrowdStrike’s Unique Approach to Cybersecurity

CrowdStrike is unique because it leverages the network effects of crowdsourced data from its customer base and applies it to modern technologies, including AI, cloud computing, and graph databases to detect threats and stop breaches. In 2011, the Austin, Texas-based company built its central cloud native platform leveraging AI. Dubbed the “Falcon”, this platform became the industry’s first multi-tenant, cloud native, intelligent security solution. The cybersecurity solution protects various endpoints such as desktops, laptops, servers, virtual machines, and IoT devices.

CrowdStrike: An AI-Driven Cybersecurity Solution

CrowdStrike leans on the most up-to-date artificial intelligence and machine learning to drive superior security outcomes. CRWD uses AI to detect and prevent malware and ransomware before they can cause issues. Additionally, “Charlotte AI,” its generative AI-powered platform, automates security operations, improves response times, and enhances overall protection. Last night, CrowdStrike had a shareholder meeting that revealed several favorable tailwinds, including:

·       Robust Q2 Performance & Outlook: CRWD announced a record-breaking second quarter with significant revenue and Annual Recurring Revenue (ARR) growth. Additionally, the company expects $20 billion in ARR by the end of the decade, far above its previous $10 billion goal. The robust guidance shows that CRWD management has clarity and confidence in the company’s long-term financial picture.

·       Betting on AI: CRWD doubled down on its AI-centric approach, announcing new “Agentic” AI solutions, focused on solving complicated security tasks. CRWD also announced that it purchased Pangea, a company that concentrates on AI security.

·       Platform Consolidation: CRWD has transformed into a one-stop shop for cybersecurity needs, combining multiple tools into a single, unified platform.  

Thursday, investors applauded the news, sending shares up more than 10% as trading volume swelled to nearly three times the norm. The robust price and volume action are a sign of heavy demand for CRWD shares.

CrowdStrike: A Steady, Consistent Grower

A significant driver of CrowdStrike’s customer growth is the Falcon Flex subscription model, which simplifies security adoption by offering modular, scalable cybersecurity solutions. This flexibility encourages a sticky customer base and ensures steady, long-term revenue growth.

Meanwhile, the company’s subscription business model is driving its overall top-line performance.

Bottom Line

CrowdStrike is a leader in the cybersecurity industry due to its unique AI-driven platform. With clients flocking to its cutting-edge AI technology, investors should expect strong financial performance and sustained growth from CRWD.

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This article originally published on Zacks Investment Research (zacks.com).

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