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Is CrowdStrike a buy?

It’s time to talk about another up and coming digital technology name! Here is the breakdown on $CRWD, otherwise known as CrowdStrike.

Current Price: $140.00

52/Wk High: $153.10

52/Wk Low: $31.95

Read below for the breakdown!

CrowdStrike is a major cloud company in which provides a series of endpoint security solutions through the cloud. The company’s main focuses are within antivirus protection, EDR solutions, and much more.

Crowdstrikes core platform called Falcon collects data in realtime and protects systems from viruses, therefore being deemed an anti-virus cloud software.

Throughout COVID-19 the cloud stocks and companies have been growing at an extremely fast rate. While the stock has run an already huge amount this year the outlook is terrific and the stock could be a solid buy.

Just weeks ago CrowdStrike reported another beat for Q2 and the company performed well throughout the core of the pandemic.

During the second quarter CrowdStrike added 969 new subscription customers, and closed their second largest deal ever. Furthermore, the company maintained a solid subscription growth rate of 89%.

Digging into the earnings themselves, the numbers were great. CrowdStrike reported an EPS beat, with an earnings per share of $0.03 versus the analysts consensus estimate of $-0.01. 

Not only that but revenues continued to grow significantly in the second quarter. Second quarter 2021 revenues totaled $199 million, up from Q2 of 2020, when revenue was just $108 million. 

Taking a look at the balance sheet, the it's hard to imagine a better set of numbers. As of Q2 2021 Crowdstike maintained zero debt whatsoever and held a solid cash on hand position of $1.065 billion as of July 31st.

Given the solid performance throughout Q2 and the strong balance sheet, most analysts upgraded targets in recent weeks.

Currently, the average price target for $CRWD sits at $149.55/share, representing a 6.60% upside. Furthermore, the high price target sits at $172.00/share, representing a 22.60% upside, and the low price target sits at $116.00/share, representing a -17.31% loss.

Not only are the so called experts bullish on $CRWD but the big money is as well. Currently, 70.65% of CrowdStrike is owned by institutions. Top holders include Jennison Associates, Allianz Global Investors, and Coatue Management.

CrowdStrike stock currently trades at a high price to sales ratio of 47.92 times and a price to book value of 39.59 times. Secondly, $CRWD trades at a high $30.8 billion market cap.

Taking a look at the charts, CrowdsStike has been very bullish of late. According to the six month charts, the MACD sits within a very narrow range around 5.58 and is running with sideways (flat) momentum.

On the other hand, the six-month RSI sits at 60.63, and the CCI rests at a high 108.38. Not only that, but the stock currently trades roughly 13 points off its highs.

Finally, CrowdStrike announced and closed the acquisition of Preempt Security for $96 million. Preempt Security provides zero trust and conditional access technology.

In the long term this is sure to assist the company's growth, and it will be interesting to see how Preempt will add to CrowdStrike.

Overall I like CrowdStrike here around $140/share and expect in the near to mid term that a $150 price target is reasonable. 

Given the solid fundamentals, consistent growth, and recent acquisition, I believe the case for CrowdStrike is more bullish than bearish.


Disclaimer: This is not direct financial advice, simply opinion based on independent research. Luke Donay holds $CRWD long calls and is long the position.

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