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Over the week, CrowdStrike Holdings (Nasdaq: CRWD) flatlined its returns at 0.5% gains. However, today’s price correction masks the 4.5% price spike from Friday to Monday. The cloud-based cybersecurity firm received the attention of Morgan Stanley analysts, having noted that its market cap could reach $100 billion during the next 12 months.
This would mark an 18% gain for CRWD shareholders from its current market cap of $84.50 billion. Moreover, Morgan Stanley analyst Hamza Fodderwala noted that CrowdStrike’s value is positioned to nearly double in the next five years. This optimistic assessment is based on the growing adoption of cloud-based security and identity protection.
Year-to-date, CRWD stock gained 42% value. Should investors take advantage of the current price correction ahead of earnings ending April 2024, scheduled for June 4th?
CrowdStrike’s Key Product Explained
The firm’s core revenue generator is the CrowdStrike Falcon platform. The company receives a stable stream of subscription fees through its different cybersecurity modules. The Falcon platform offers comprehensive, cloud-native endpoint protection.
The latter jargon is important to understand as “cloud-native” and “endpoint” means that all services can be accessed with internet access alone, without the dependency on localized hardware or connectivity. Conversely, CrowdStrike’s infrastructure is in charge of data management in key aspects – vulnerability prevention and restoration.
In other words, cloud-native flexibility translates to scalable and easily deployable cybersecurity for customers. With the introduction of AI algorithms to learn from collected data, CrowdStrike also benefits from the network effect. The more subscribers the firm attracts, the more agile AI becomes in preventing and hunting down cybersecurity threats.
The company summarized its next-gen Security Information and Event Management (SIEM) as a continually reinforcing loop between data inflows, detection, analysis, and response.