CrowdSrike Stock Is up 167% in the Last Year: Here’s Why Even More Is Coming

CRWD (TSX:CRWD) stock already demonstrated it can achieve huge growth. But with focus on cybersecurity, there is even more to come.

| More on:
A worker drinks out of a mug in an office.

Source: Getty Images

It’s not often that we focus on American companies that Canadian investors should buy. However, it’s quite possible to invest in stocks in the United States market. In fact, doing this can provide you with a far more diversified portfolio, with access to some of the safest companies in the world!

One of those companies you might want to consider in this case is CrowdStrike Holdings (NASDAQ:CRWD). There are both macro and micro reasons for this, but there is also one glaringly obvious reason as well. The share price is up a whopping 167% for CRWD stock in the last year alone. So, let’s get into why this company has more growth potential on the way.

Financially sound

CRWD stock has already proven that it can continue to be profitable, even during some of the hardest times on the market. That’s because cybersecurity has proven to be quite essential for companies and, indeed, governments around the globe.

This was demonstrated during earnings, where the company recently reported revenue of US$2.17 billion, a 62% increase year over year. Furthermore, the stock became even closer to profitability, reporting a net loss of US$244.7 million for the last year. Still, it should now turn towards a profit for this year.

Even so, the company continues to hold solid free cash flow, allowing them financial flexibility to continue reinvesting in the company. What’s more, it holds a healthy gross margin of 78%, so the stock continues to be quite efficient in generating profit from revenue. So, once that loss is gone, it doesn’t look likely to come back.

Strong growth on the way?

First off, why are investors interested in CRWD stock in the first place? The company is an endpoint protection and cloud security company. It offers a suite of services and products, all aimed at keeping organizations safe from cyber threats. Not only can it detect issues, but it also provides intelligence on how to prevent them in the future — hence, why the company has been of such focus.

With everything online and digital, that information needs to be protected. And CRWD stock has seen a lot of growth from this. Projected earnings growth is now estimated at 91.6% year over year by analysts. And that could translate to an even higher stock price.

Part of this growth comes from a recurring revenue model, with subscriptions generating income again and again. This provides the stock with stability, predictability, and the ability to grow further.

Industry leader

Furthermore, CRWD stock is a leader in the endpoint security market. It holds a strong reputation, with advanced abilities to detect threats. What’s more, the stock boasts a diverse customer base that continues to grow all the time. In fact, a large number of the company’s client base are Fortune 500 companies. That makes it easier to trust, knowing some of the largest companies in the world already do.

The stock is also known for innovation in the field. And that needs to be kept up if the company hopes to compete. CRWD stock actively invests in research and development, improving the platform and introducing new features. Both to protect more but also make it easier for customer use. This focus should keep them ahead of the curve for the foreseeable future.

And that will be necessary as more and more companies continue to enter the cybersecurity space. Yet this space is essential for the future — a future where CRWD stock will likely play a large role.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends CrowdStrike. The Motley Fool has a disclosure policy.

More on Tech Stocks

Dots over the earth connecting the world
Tech Stocks

Hot Takeaway: Concentration in 1 Stock Can Be Just Fine

Concentration in one stock can be alright under the right circumstances, and far better than buying a bunch of poor-performing…

Read more »

A worker uses a double monitor computer screen in an office.
Tech Stocks

Forget TD Stock: 2 Tech Stocks to Buy Instead

As bank stocks continue disappointing investors in 2024, you can consider adding these two top Canadian tech stocks to your…

Read more »

financial freedom sign
Tech Stocks

1 TSX Tech Stock That Has Created Millionaires and Will Continue to Make More

Constellation Software is a TSX stock tech that has delivered game-changing returns to shareholders since its IPO in 2006.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

Payfare Can Potentially Provide Explosive Growth

Payfare is a global financial technology company that powers digital banking, instant payment, and loyalty reward solutions for the gig…

Read more »

online shopping
Tech Stocks

1 Hidden Catalyst That Could Ignite Shopify Stock

Here's why Shopify (TSX:SHOP) ought to remain a top growth stock investors continue to focus on for the long haul.

Read more »

Man considering whether to sell or buy
Tech Stocks

WELL Stock: Buy, Sell, or Hold?

WELL stock has a lot of upside as the company is likely to continue to grow, posting positive earnings in…

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Tech Stocks

Finally Going Private: What Should Nuvei Investors Do Now?

Understanding the reasons and factors behind a public company going private can help investors make an educated decision.

Read more »

woman data analyze
Tech Stocks

1 Stock I’d Drop From the “Magnificent 7” and 1 I’d Add

Tesla (NASDAQ:TSLA) stock is part of the Magnificent Seven, but Shopify (TSX:SHOP) is growing faster.

Read more »