What happened
CrowdStrike (CRWD 3.63%) stock gained 16.3% in March, according to data from S&P Global Market Intelligence. The cybersecurity company's share price gained ground in conjunction with positive momentum for the broader market.
The Nasdaq Composite index climbed roughly 3.4% last month, and many software companies with growth-dependent valuations saw big gains as the market bounced back from big sell-offs in February. CrowdStrike also appears to have gotten a boost from the announcement of an expanded partnership with Web services and security company Cloudflare and conditions pointing to increased demand for cybersecurity services.
Image source: Getty Images.
So what
CrowdStrike and Cloudflare published a press release on March 17 announcing that they were expanding their partnership to bring integrated zero-trust security to mobile devices, computers, servers, and other hardware protected by the former company's software. Cloudflare is integrating its zero-trust security platform with CrowdStrike's Falcon platform and its zero-trust-assessment service. The two companies are both leaders in their corners of the cybersecurity market, and the partnership seems likely to strengthen each of their respective positions.
President Biden also made comments on March 21 that seem to have created bullish momentum for CrowdStrike and other cybersecurity providers. Biden said that companies needed to do more to protect themselves against cyberattacks and also noted the potential that Russia could carry out cyberattacks against the United States.
Now what
With CrowdStrike valued at roughly $52.6 billion and trading at roughly 24.4 times this year's expected sales, the company has a growth-dependent valuation.
The stock has seen volatile trading this year as investor appetite for software stocks with forward-looking valuations has vacillated, and it could continue to see trading affected by moves for the broader market.
On the other hand, CrowdStrike is a category leader with an attractive long-term growth outlook, and I think the stock is a worthwhile buy for risk-tolerant investors looking for exposure to the cybersecurity space. The demand for endpoint security services will only increase, and CrowdStrike appears to be in good position to maintain a leadership position in the space.
