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Why Crowdstrike Holdings Was Up 11.5% This Week

By Nicholas Rossolillo – Oct 15, 2021 at 7:09PM

Key Points

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A bunch of new product releases could open more doors to this security software leader.

What happened

Shares of endpoint cybersecurity software leader Crowdstrike Holdings (CRWD 4.21%) rose by 11.5% this week, according to data provided by S&P Global Market Intelligence. Most of the gains occurred on Wednesday following an investor briefing on a number of new product launches. Shares are now up 29% so far in 2021.

Three people at an outdoor cafe using laptops.

Image source: Getty Images.

So what

Based on that investor briefing, it's clear Crowdstrike's development team has been busy. It introduced FileVantage, a new module for detecting data integrity and possible tampering by unauthorized users. It also announced a new open data-sharing partnership with firms including Alphabet (GOOGL 2.81%) (GOOG 2.65%), Okta (OKTA 2.25%), ServiceNow (NOW 5.71%), and Zscaler (ZS 4.11%), giving members of this security alliance greater ability to detect and hunt down security risks.

Now what

Crowdstrike has grown at an incredible pace and has hauled in $1.14 billion in revenues over the last 12 months. But it still commands just a small share of its addressable market, claiming only some 12% of endpoint security by its own estimates.

However, with more workloads migrating into the cloud every day and cyber threats only growing in prevalence and complexity, there's plenty of room for Crowdstrike to continue growing. It has also been steadily expanding the number of modules on its platform, extending its leadership in endpoint security to also encompass general cloud security, identity protection, and data log management. As a result, current year revenue is forecast to be at least 59% higher than 2020's revenue.

Of course, it's no secret that Crowdstrike is on a roll. As of this writing, the stock trades for an incredible premium of 54 times trailing 12-month sales. The company will need to continue putting up impressive growth figures for at least a couple more years to justify its current share price. But thus far, betting against the company has been a mistake. Highly profitable and finding no shortage of new customers or uses for its cloud-native software, Crowdstrike has been a top name in the cybersecurity industry for good reason.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Nicholas Rossolillo and his clients own shares of Alphabet (C shares) and CrowdStrike Holdings, Inc. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), CrowdStrike Holdings, Inc., Okta, ServiceNow, Inc., and Zscaler. The Motley Fool has a disclosure policy.

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