Cyber-attacks are a major source of frustration, and even danger, in the world today. This makes a workload protection firm like CrowdStrike (CRWD) all the more valuable.
Founded in 2011, CrowdStrike was in the cybersecurity game before many other start-ups. Today, CrowdStrike is an absolute giant in the industry, with a nearly $58 billion market capitalization. (See CrowdStrike stock chart on TipRanks)
Admittedly, CRWD stock isn’t super-cheap. If you’re looking for a penny stock that might double in a few weeks, this won’t fit the bill.
On the other hand, if you are on the hunt for a leader in the digital security market that offers consistent growth, CrowdStrike definitely deserves your attention.
A Quick Look at CRWD Stock
CRWD stock wasn’t always as pricey as it is now. In fact, the stock sold for $40 at one point in March of 2020.
That changed in the wake of the COVID-19 pandemic, when many businesses went online, accelerating the need for cybersecurity. As a result, CRWD stock went on a rocket ride. By the end of 2020, it was above $200. That bullish trajectory persisted into 2021, with CRWD stock landing at $256 and change on June 22.
Now, there is a concern that should be mentioned: Crowdstrike has earnings per share of -72 cents on a trailing 12-month basis. That’s not horrendous for a $250-ish stock. Really, it’s almost break-even.
Still, the investors will surely hope to see that number turn positive in the coming months.
A High Target
When prominent analysts offer their opinions on stocks, it can help investors to make more informed decisions. In a notable example of this, Stifel analyst Brad Reback recently upgraded his rating on CRWD stock from “Hold” to “Buy.”
Along with that, Reback raised his price target on the stock from $240 to $300.
Now, the skeptics might say that Reback had little choice in the matter. After CRWD stock blew past $250, a $240 price target wasn’t reasonable anymore.
That might or might not be the case. Either way, $300 is a high target for the stock, and it represents a major vote of confidence in Crowdstrike’s ability to execute.
Moreover, that’s not Reback’s only high target for Crowdstrike. Specifically, he reportedly believes that the company can, over time, increase its customer count to more than 100,000. That would be nearly 10 times the 11,420 customers that Crowdstrike had reported in the company’s January quarter.
Is It Realistic?
Now, that’s quite an ambitious prediction. A nearly 10-fold increase in customer count would be a monumental achievement, even in the long term.
CrowdStrike doesn’t need to achieve that exact goal in order to provide supreme shareholder value. Nevertheless, a legitimate question remains as to whether a 100,000 customer count is realistic for CrowdStrike.
Let’s do some calculating and see. During the first quarter of fiscal-year 2022, CrowdStrike added 1,524 net new subscription customers.
Furthermore, CrowdStrike’s 11,420 subscription customers as of April 30, 2021, represented 82% growth year-over-year.
No one should expect the company to post an 82% customer-count growth rate in the coming quarters. However, based on past performance, it is possible for CrowdStrike to add 1,000 to 2,000 new customers every three months.
Those numbers will not bring the company to 100,000 customers anytime soon. Still, CrowdStrike’s bottom line should reflect the company’s continued growth as a leader in the workplace protection field.
Wall Street Weighs In
According to TipRanks’ analyst rating consensus, CRWD is a Strong Buy, based on 16 Buy and 1 Hold ratings. The average CrowdStrike analyst price target is $257.47, implying 0.34% upside potential.
Reback’s blessing isn’t, by itself, a reason to load the boat on CRWD stock. However, it is a positive sign.
Clearly, a $300 price target is aggressive – and yet, irrespective of the exact customer count, it’s definitely achievable.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.