CrowdStrike stock returns
Cybersecurity company CrowdStrike (CRWD) rose 7.9% on June 28, 2019, to close trading at $68.29 per share. The company was listed as a public company last month and has been expectedly volatile since it began trading.
CRWD issued 18 million shares at a price of $34 per share and raised $612 million in its IPO. CrowdStrike increased its IPO price band from between $19 to $23 to between $28 and $30. The stock opened trading at $63.5 per share on June 12 and closed at a price of $58 per share. This means CRWD stock is currently trading 17.7% above its first day of closing.
The company is valued at $13.62 billion
CrowdStrike is now valued at $13.62 billion, its market capitalization. In the last reported fiscal year (year ended in January), CRWD brought in revenue of $250 million. This was a 100.0% year-over-year rise. While net loss also rose from $135 million in 2018 to $140.1 million in 2019, the company managed to improve net margin from -108.0% to -56.0% in this period.
Though CrowdStrike is valued at 54.4x 2019 sales, the market opportunity remains huge. CRWD competes with cyber giants such as Cisco (CSCO), Palo Alto Networks (PANW), Fortinet (FTNT), Check Point (CHKP), and Symantec (SYMC) in this space. These five companies account for around 50.0% of the worldwide security appliance market.
However, despite a competitive environment, CRWD will likely benefit from the growing number of cyber attacks. The sophistication and hacking methods of cyber attacks continue to change with time, and cybersecurity companies will need to come up with new and innovative solutions to tackle these attacks.
CRWD has already created a niche among federal agencies. The company was in the news when it identified two Russian espionage groups that managed to influence the presidential elections back in 2016 by hacking the Democratic National Committee email servers. It also assisted the US Department of Justice in exposing five Chinese hackers a few years back.
CRWD was founded in 2012 and has already gained a multi-billion-dollar valuation. It now needs to support this valuation by growing revenue and profitability at a fast rate.