As a youth, my father taught me to walk with confidence, and to never look down while walking through a crowd. I’ve never forgotten this, as it applies to many things in life, even companies whose name includes “crowd.” I am referring here to cybersecurity stalwart CrowdStrike Holdings Inc. (CRWD), writes Jim Woods, editor of Forecasts & Strategies.
CrowdStrike holds its head above the crowded competition by being the dominant “central operating system” player for enterprise cybersecurity. The company provides its Falcon Platform Flywheel. The software structure allows CrowdStrike to drive growth not just via signing new clients, but also by allowing existing clients to expand their cybersecurity software via the seamless activation of so-called “additional modules.”
CrowdStrike Holdings Inc. (CRWD)
This model has allowed CrowdStrike to collect enormously on the annual recurring revenue (ARR) front. Last quarter, CrowdStrike saw ARR of $5.5 billion, a metric that grew at the robust rate of 24% year-over-year. CrowdStrike management says it will hit some $20 billion in ARR by fiscal year 2036.
Now, one measure of a company’s product quality is its retention rate. Here, CrowdStrike shines with gross retention at an industry-leading 97%– a remarkable tribute to the indispensability of the Falcon platform. When a company is a leading player in a leading industry and with such loyal brand stickiness, that gets my bullish radar pinging.
That is one reason why we recommended the stock in November 2023. Since then, shares have delivered a total return of up to 231%. Now is the time to add this stellar play if you haven’t yet done so.
Recommended Action: Buy CRWD.
