HuiEr
2021-04-05
[贱笑]
CrowdStrike: Time To Buy This Cybersecurity Leader
免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。
分享至
微信
复制链接
精彩评论
我们需要你的真知灼见来填补这片空白
打开APP，发表看法
APP内打开
发表看法
6
1
{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":349565487,"tweetId":"349565487","gmtCreate":1617627090949,"gmtModify":1634297482531,"author":{"id":3577068381472100,"idStr":"3577068381472100","authorId":3577068381472100,"authorIdStr":"3577068381472100","name":"HuiEr","avatar":"https://static.tigerbbs.com/dc757214722cde01272e2656433b40a8","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":3,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p><span>[贱笑] </span><br></p></body></html>","htmlText":"<html><head></head><body><p><span>[贱笑] </span><br></p></body></html>","text":"[贱笑]","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":6,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/349565487","repostId":1182378447,"repostType":4,"repost":{"id":"1182378447","pubTimestamp":1617623468,"share":"https://www.laohu8.com/m/news/1182378447?lang=&edition=full","pubTime":"2021-04-05 19:51","market":"us","language":"en","title":"CrowdStrike: Time To Buy This Cybersecurity Leader","url":"https://stock-news.laohu8.com/highlight/detail?id=1182378447","media":"seekingalpha","summary":"Summary\n\nCloud and cybersecurity spend are expected to increase significantly over the course of the","content":"<p><b>Summary</b></p>\n<ul>\n <li>Cloud and cybersecurity spend are expected to increase significantly over the course of the next few years, benefiting the leaders of the sector.</li>\n <li>Robust financial performance during the work-from-home shift is likely to continue.</li>\n <li>CRWD has the potential to witness significant operating and earnings leverage from FY22 to FY25.</li>\n <li>Risks to watch stem from its customer base, expansion and valuation.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5cea90a576bf71e95e6777dbc25a8ac5\" tg-width=\"1536\" tg-height=\"1024\"><span>Photo by Sundry Photography/iStock Editorial via Getty Images</span></p>\n<p>As shares in multiple different cloud and cybersecurity names continue to underperform against the market during 2021, digging for good value and positive long-term outlook bring multiple names to mind. Cloud/cybersecurity is one sector with a particularly bright outlook as IT spend on this remains quite low, and is expected to increase over the next couple of years in the face of constantly rising threats. CrowdStrike (CRWD) is positioned very well to gain share and continue its strong growth trajectory, and the recent underperformance brings a potentially attractive entry point, although valuation remains a key part to watch.</p>\n<p><b>Rising Cloud and Cybersecurity Spend</b></p>\n<p>Increasing cloud and cybersecurity spend across the board will serve as a large tailwind for the sector and inevitably CrowdStrike, as it continues to advance its product offerings and subscription base. Cloud and cybersecurity are both fairly fragmented sectors, leaving rooms for leading companies like CrowdStrike to gain and secure market share through maintained subscriptions.</p>\n<p>Cloud and cybersecurity spend are expected to increase significantly over the course of the next few years, on the back of factors such as increasing number of cyber attacks, increased reliance on cloud-based services and applications, growing demand for managed security services, data privacy concerns and government compliance.</p>\n<p>Internally, CrowdStrike sees the cloud security opportunity expanding significantly, projected to be about $12.4 billion on 5.7% of IT budget spend; this opportunity would represent tenfold growth from 2020's actual $1.2 billion cloud security spend. With the possibility of more data breaches alongside the aforementioned factors, increased IT spend to ~7.5% would represent an opportunity of $16.3 billion.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/143bdb685bc34bca9d6a2dd53fa6a356\" tg-width=\"640\" tg-height=\"285\"><span>Graphic from CrowdStrike</span></p>\n<p>Longer-term external forecasts point to a slight uptick in the growth of cloud spending, while cybersecurity spend as a whole will increase quite significantly but at a slightly lower rate.</p>\n<p>VM Intelligence projects the cloud security market to reach $37.7 billion by 2027, a 25.9% CAGR from 2019's $6.7 billion figure. Again, a rise in security threats and a tailwind stemming from a shift to cloud technology/infrastructure will boost the market, with companies needing solutions to provide data protection and privacy and ensure regulatory compliance. With a large majority of companies running some sort of cloud-based software, demand for cloud security solutions are rising.</p>\n<p>Global cybersecurity spend has a strong projected runway as well, rising at a ~12% CAGR from an estimated $165.8 billion in 2021 to $366.1 billion in 2028 (cloud security has one of the highest CAGRs of the cybersecurity sub-segments). North America is expected to dominate the industry's growth, while Asia Pacific is expected to grow the quickest with more government investment in this and auxiliary industries.</p>\n<p>Solid growth in North America and rapid growth in Asia-Pacific further support continuance of high double-digit growth in revenues for CrowdStrike as it increases international presence.</p>\n<p><b>Robust Financials</b></p>\n<p>CrowdStrike's financial performance during the shift to remote and cloud work shone, with the company (for the most part) exceeding a projection for the fiscal year from just before the Q2 report. Highlighted from that projection had CrowdStrike netting $950 million to $1.0 billion in ARR, 10,000 customers, Q4 gross margin at 78%, and an FY net margin at (9.5%) on $850 million revenue/$629 million gross profit.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/91c1c7926fb836825a4aaec30396fc2f\" tg-width=\"640\" tg-height=\"253\"><span>Graphic from SA</span></p>\n<p>As seen above, CrowdStrike's ARR topped $1 billion, as Q4's record net new ARR of $143 million pushed the figure higher. While customers fell shy of the 10,000 mark, customer base in Fortune 100 and Fortune 500 companies expanded. CFO Burt Podbere noted that the company posted \"record subscription gross margin at the high end of our target model and record operating and free cash flow.\" Sequential improvement in margins - at 80% subscription and 77% gross for Q4, 79% and 76% for the year - on top of strong revenue growth has provided operating leverage, which will aid the shift to profitability.</p>\n<p><b>Strong Growth Outlook</b></p>\n<p>With the strong Q4/FY report, CrowdStrike increased guidance for Q1 by ~7.5% to ~$290 million and FY22 revenues by a similar percentage to ~$1.32 billion. However, CrowdStrike has the potential to beat those forecasts to $1.35-1.36 billion for the current year, as well as leading to an increased long-term forecast.</p>\n<p>CrowdStrike has proved that it can acquire new customers easily and efficiently, setting it up for blazing revenue growth in the upcoming years. An original forecast for $1.5 billion in FY23 and $2.5 billion in FY25 revenues now seem to undershoot the company's potential. The combination of more records in net new ARR on top of incremental growth in existing ARR from previous customers sets revenues up for approximately 38% growth through 2025, suggesting FY23 revenues at $1.85 billion rising to $3.2 billion by FY25, far ahead of the prior projection.</p>\n<p>Some of the factors that help cement this projection are retention rates and expanded product offerings across different business sizes. CrowdStrike boasts a high gross retention at 98% for the past two fiscal years; the company's dollar retention has remained above 120% for the past three fiscal years as customers continue to add subscriptions. This is visible within the rising amount of customers on multiple subscriptions, seen below. Customers on 4 or more subscriptions have risen from 30% to 63% in just three years, testifying to the value proposition from top-of-the-line features.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7c4d023f856d53085d1dc63e5ba7f6b\" tg-width=\"640\" tg-height=\"315\"><span>Graphic from SA</span></p>\n<p>While CrowdStrike does have over half of the Fortune 100 list as customers, the company's products aren't solely for the megacaps. Falcon's ease-of-use, scalability, high efficacy and relative low cost have made it a top choice for even smaller businesses looking to implement industrial level security. While there is a high costliness of installing and updating cloud security services which could prevent MSMEs transitioning to the cloud from adopting broad cloud security protection, the Falcon offers an ROI of 300-400% with a payback period of less than 3 months on average, making it a great choice for smaller enterprises.</p>\n<p>CrowdStrike and other peer leader Zscaler (ZS) recently announced the expansion of their partnership, providing an identity and data-centric zero trust approach. Zscaler will be leveraging CrowdStrike's Zero Trust Assessment [ZTA] to integrate real-time security with Zscaler Private Access [ZPA]. The expansion provides a range of benefits and enhanced value for joint customers, which should serve to cement retention of those customers' subscriptions to both CrowdStrike and Zscaler.</p>\n<p>International revenue generation and expansion also are a bright point for future growth, as Asia-Pacific notably has a strong CAGR forecast for the industry. CrowdStrike has locations in Japan, Australia and Singapore among others primarily in EMEA. International revenues have risen 98% y/y to $247 million, comprising 28% of total revenues for FY21, up from 23% in FY19; increased investment to expand international operations could see contribution of 33-35% of revenues by FY23.</p>\n<p>With the aforementioned revenue growth projections, CrowdStrike has the potential to witness significant operating and earnings leverage from FY22 to FY25, as operating expenses have practically fallen into the long-term targets per its operating model: S&M 30-35% of revenues, R&D 15-20% and G&A 7-9%. Actuals for Q4 were 37%, 19% and 8%. This has the potential to drive and maintain operating margin in the mid-20% range as revenues grow, leading to low triple-digit EPS growth from $0.65 in FY23 to $2.80 by FY25.</p>\n<p><b>Risks to the Forecast</b></p>\n<p>Such a forecast isn't immune to risks, and there are quite a few to be aware of with CrowdStrike, stemming from its customer base, expansion and valuation.</p>\n<p>Even with the growth to CrowdStrike's customer base to just under 10,000 by the fiscal year, +82% y/y, a fair proportion of its business is reliant on a few key channel partners. While it is a decreasing percentage for channel partners A/B (likely that the two have the same dollar amount y/y offset by additional new customers), loss of business of any of the customers/channel partners could impact revenues and balance sheet strength, thus significantly impacting forward revenue projections and valuation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a9e423abddd79b6414ea99b31de8ae07\" tg-width=\"640\" tg-height=\"334\"><span>Graphic from 10-K</span></p>\n<p>One other customer-centric risk could arise within upselling, or getting customers to add more subscriptions. CrowdStrike currently has both synergies of ARR growth from new customer additions and customers upgrading to more subscriptions, but if/when a majority of the customers are paying for 4 to 6 subscriptions, additional revenue growth is likely to be more reliant on customer acquisition. If customer growth inevitably slows, whether that be in three, five or seven years, CrowdStrike will likely need to have a significant portion (>70%) on >4 subscriptions to ensure constant growth in revenues at a fair, 15-20% rate.</p>\n<p>Expansion, primarily internationally, exposes CrowdStrike to some key risks that could impact bottom line growth. This could stem from \"higher costs of doing business internationally... double taxation of our international earnings and potentially adverse tax consequences... increased travel, infrastructure, and legal compliance costs\" as well as compliance and regulatory issues. Should extra costs arise from international segment growth to ~$750 million in revenues by 2025, overall profitability could take a 15-20% dent, with EPS dropping to $2.35 from $2.80.</p>\n<p>Valuation compared to CrowdStrike's main peer basket of Palo Alto Networks (PANW), Fortinet (FTNT), Cloudflare (NET), VMware (VMW) and Zscaler is mixed, with some high multiples attached to both CrowdStrike and Zscaler. VMWare and Palo Alto, more established and profitable, boast the highest margins and the most attractive valuations, yet forward revenue growth rates are some of the lowest, at about 9% and 19%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/20c3219cbe3e0ad6b4353b19914ca89a\" tg-width=\"635\" tg-height=\"487\"><span>Data by YCharts</span></p>\n<p>CrowdStrike, Zscaler and Cloudflare have the fastest revenue growth rates over the next few years, and as expected, trade at significant premiums to the basket, all above 40x TTM sales and 30-35x forward sales. Forward EV/EBITDA ratios for the three are all >250x, suggesting that the three could be pricing in a few years' growth already.</p>\n<p>This is one major risk to CrowdStrike at the moment - as the company continues to scale and grow revenues at a rapid pace, it will face multiple contraction, similar to Palo Alto, whose 19x PS ratio in 2015 (at $1 billion revenues and approx. +54% y/y growth) contracted to 7x by 2020, leaving shares gaining barely 30% after that peak to pre-pandemic levels. As CrowdStrike comes to maturity in revenues and declining y/y growth rates, multiple contraction could be the largest factor in preventing shares from moving higher.</p>\n<p><b>Overall</b></p>\n<p>The cloud-native Falcon platform and its ease of use in remote environments, scalability and robust value proposition combined with the range of modules offered allude to CrowdStrike solidifying its position at the top of the pack within its peers in the long run. The company should maintain status as one of the fastest growing endpoint security firms, reflected within its premium valuation relative to peers. Rising cloud and cybersecurity spend over the next couple of years on a company basis and geographic basis point to positive synergies for revenue and customer growth.</p>\n<p>CrowdStrike has a robust financial picture and a strong growth outlook, with strong earnings leverage on top of significant revenue growth. However, customer-centric and international risks do exist, yet valuation in terms of multiple contraction could be the most important risk to watch, as it could limit returns over the next few years.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>CrowdStrike: Time To Buy This Cybersecurity Leader</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCrowdStrike: Time To Buy This Cybersecurity Leader\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-05 19:51 GMT+8 <a href=https://seekingalpha.com/article/4417561-crowdstrike-time-to-buy-this-cybersecurity-leader><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nCloud and cybersecurity spend are expected to increase significantly over the course of the next few years, benefiting the leaders of the sector.\nRobust financial performance during the work-...</p>\n\n<a href=\"https://seekingalpha.com/article/4417561-crowdstrike-time-to-buy-this-cybersecurity-leader\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"CRWD":"CrowdStrike Holdings, Inc."},"source_url":"https://seekingalpha.com/article/4417561-crowdstrike-time-to-buy-this-cybersecurity-leader","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1182378447","content_text":"Summary\n\nCloud and cybersecurity spend are expected to increase significantly over the course of the next few years, benefiting the leaders of the sector.\nRobust financial performance during the work-from-home shift is likely to continue.\nCRWD has the potential to witness significant operating and earnings leverage from FY22 to FY25.\nRisks to watch stem from its customer base, expansion and valuation.\n\nPhoto by Sundry Photography/iStock Editorial via Getty Images\nAs shares in multiple different cloud and cybersecurity names continue to underperform against the market during 2021, digging for good value and positive long-term outlook bring multiple names to mind. Cloud/cybersecurity is one sector with a particularly bright outlook as IT spend on this remains quite low, and is expected to increase over the next couple of years in the face of constantly rising threats. CrowdStrike (CRWD) is positioned very well to gain share and continue its strong growth trajectory, and the recent underperformance brings a potentially attractive entry point, although valuation remains a key part to watch.\nRising Cloud and Cybersecurity Spend\nIncreasing cloud and cybersecurity spend across the board will serve as a large tailwind for the sector and inevitably CrowdStrike, as it continues to advance its product offerings and subscription base. Cloud and cybersecurity are both fairly fragmented sectors, leaving rooms for leading companies like CrowdStrike to gain and secure market share through maintained subscriptions.\nCloud and cybersecurity spend are expected to increase significantly over the course of the next few years, on the back of factors such as increasing number of cyber attacks, increased reliance on cloud-based services and applications, growing demand for managed security services, data privacy concerns and government compliance.\nInternally, CrowdStrike sees the cloud security opportunity expanding significantly, projected to be about $12.4 billion on 5.7% of IT budget spend; this opportunity would represent tenfold growth from 2020's actual $1.2 billion cloud security spend. With the possibility of more data breaches alongside the aforementioned factors, increased IT spend to ~7.5% would represent an opportunity of $16.3 billion.\nGraphic from CrowdStrike\nLonger-term external forecasts point to a slight uptick in the growth of cloud spending, while cybersecurity spend as a whole will increase quite significantly but at a slightly lower rate.\nVM Intelligence projects the cloud security market to reach $37.7 billion by 2027, a 25.9% CAGR from 2019's $6.7 billion figure. Again, a rise in security threats and a tailwind stemming from a shift to cloud technology/infrastructure will boost the market, with companies needing solutions to provide data protection and privacy and ensure regulatory compliance. With a large majority of companies running some sort of cloud-based software, demand for cloud security solutions are rising.\nGlobal cybersecurity spend has a strong projected runway as well, rising at a ~12% CAGR from an estimated $165.8 billion in 2021 to $366.1 billion in 2028 (cloud security has one of the highest CAGRs of the cybersecurity sub-segments). North America is expected to dominate the industry's growth, while Asia Pacific is expected to grow the quickest with more government investment in this and auxiliary industries.\nSolid growth in North America and rapid growth in Asia-Pacific further support continuance of high double-digit growth in revenues for CrowdStrike as it increases international presence.\nRobust Financials\nCrowdStrike's financial performance during the shift to remote and cloud work shone, with the company (for the most part) exceeding a projection for the fiscal year from just before the Q2 report. Highlighted from that projection had CrowdStrike netting $950 million to $1.0 billion in ARR, 10,000 customers, Q4 gross margin at 78%, and an FY net margin at (9.5%) on $850 million revenue/$629 million gross profit.\nGraphic from SA\nAs seen above, CrowdStrike's ARR topped $1 billion, as Q4's record net new ARR of $143 million pushed the figure higher. While customers fell shy of the 10,000 mark, customer base in Fortune 100 and Fortune 500 companies expanded. CFO Burt Podbere noted that the company posted \"record subscription gross margin at the high end of our target model and record operating and free cash flow.\" Sequential improvement in margins - at 80% subscription and 77% gross for Q4, 79% and 76% for the year - on top of strong revenue growth has provided operating leverage, which will aid the shift to profitability.\nStrong Growth Outlook\nWith the strong Q4/FY report, CrowdStrike increased guidance for Q1 by ~7.5% to ~$290 million and FY22 revenues by a similar percentage to ~$1.32 billion. However, CrowdStrike has the potential to beat those forecasts to $1.35-1.36 billion for the current year, as well as leading to an increased long-term forecast.\nCrowdStrike has proved that it can acquire new customers easily and efficiently, setting it up for blazing revenue growth in the upcoming years. An original forecast for $1.5 billion in FY23 and $2.5 billion in FY25 revenues now seem to undershoot the company's potential. The combination of more records in net new ARR on top of incremental growth in existing ARR from previous customers sets revenues up for approximately 38% growth through 2025, suggesting FY23 revenues at $1.85 billion rising to $3.2 billion by FY25, far ahead of the prior projection.\nSome of the factors that help cement this projection are retention rates and expanded product offerings across different business sizes. CrowdStrike boasts a high gross retention at 98% for the past two fiscal years; the company's dollar retention has remained above 120% for the past three fiscal years as customers continue to add subscriptions. This is visible within the rising amount of customers on multiple subscriptions, seen below. Customers on 4 or more subscriptions have risen from 30% to 63% in just three years, testifying to the value proposition from top-of-the-line features.\nGraphic from SA\nWhile CrowdStrike does have over half of the Fortune 100 list as customers, the company's products aren't solely for the megacaps. Falcon's ease-of-use, scalability, high efficacy and relative low cost have made it a top choice for even smaller businesses looking to implement industrial level security. While there is a high costliness of installing and updating cloud security services which could prevent MSMEs transitioning to the cloud from adopting broad cloud security protection, the Falcon offers an ROI of 300-400% with a payback period of less than 3 months on average, making it a great choice for smaller enterprises.\nCrowdStrike and other peer leader Zscaler (ZS) recently announced the expansion of their partnership, providing an identity and data-centric zero trust approach. Zscaler will be leveraging CrowdStrike's Zero Trust Assessment [ZTA] to integrate real-time security with Zscaler Private Access [ZPA]. The expansion provides a range of benefits and enhanced value for joint customers, which should serve to cement retention of those customers' subscriptions to both CrowdStrike and Zscaler.\nInternational revenue generation and expansion also are a bright point for future growth, as Asia-Pacific notably has a strong CAGR forecast for the industry. CrowdStrike has locations in Japan, Australia and Singapore among others primarily in EMEA. International revenues have risen 98% y/y to $247 million, comprising 28% of total revenues for FY21, up from 23% in FY19; increased investment to expand international operations could see contribution of 33-35% of revenues by FY23.\nWith the aforementioned revenue growth projections, CrowdStrike has the potential to witness significant operating and earnings leverage from FY22 to FY25, as operating expenses have practically fallen into the long-term targets per its operating model: S&M 30-35% of revenues, R&D 15-20% and G&A 7-9%. Actuals for Q4 were 37%, 19% and 8%. This has the potential to drive and maintain operating margin in the mid-20% range as revenues grow, leading to low triple-digit EPS growth from $0.65 in FY23 to $2.80 by FY25.\nRisks to the Forecast\nSuch a forecast isn't immune to risks, and there are quite a few to be aware of with CrowdStrike, stemming from its customer base, expansion and valuation.\nEven with the growth to CrowdStrike's customer base to just under 10,000 by the fiscal year, +82% y/y, a fair proportion of its business is reliant on a few key channel partners. While it is a decreasing percentage for channel partners A/B (likely that the two have the same dollar amount y/y offset by additional new customers), loss of business of any of the customers/channel partners could impact revenues and balance sheet strength, thus significantly impacting forward revenue projections and valuation.\nGraphic from 10-K\nOne other customer-centric risk could arise within upselling, or getting customers to add more subscriptions. CrowdStrike currently has both synergies of ARR growth from new customer additions and customers upgrading to more subscriptions, but if/when a majority of the customers are paying for 4 to 6 subscriptions, additional revenue growth is likely to be more reliant on customer acquisition. If customer growth inevitably slows, whether that be in three, five or seven years, CrowdStrike will likely need to have a significant portion (>70%) on >4 subscriptions to ensure constant growth in revenues at a fair, 15-20% rate.\nExpansion, primarily internationally, exposes CrowdStrike to some key risks that could impact bottom line growth. This could stem from \"higher costs of doing business internationally... double taxation of our international earnings and potentially adverse tax consequences... increased travel, infrastructure, and legal compliance costs\" as well as compliance and regulatory issues. Should extra costs arise from international segment growth to ~$750 million in revenues by 2025, overall profitability could take a 15-20% dent, with EPS dropping to $2.35 from $2.80.\nValuation compared to CrowdStrike's main peer basket of Palo Alto Networks (PANW), Fortinet (FTNT), Cloudflare (NET), VMware (VMW) and Zscaler is mixed, with some high multiples attached to both CrowdStrike and Zscaler. VMWare and Palo Alto, more established and profitable, boast the highest margins and the most attractive valuations, yet forward revenue growth rates are some of the lowest, at about 9% and 19%.\nData by YCharts\nCrowdStrike, Zscaler and Cloudflare have the fastest revenue growth rates over the next few years, and as expected, trade at significant premiums to the basket, all above 40x TTM sales and 30-35x forward sales. Forward EV/EBITDA ratios for the three are all >250x, suggesting that the three could be pricing in a few years' growth already.\nThis is one major risk to CrowdStrike at the moment - as the company continues to scale and grow revenues at a rapid pace, it will face multiple contraction, similar to Palo Alto, whose 19x PS ratio in 2015 (at $1 billion revenues and approx. +54% y/y growth) contracted to 7x by 2020, leaving shares gaining barely 30% after that peak to pre-pandemic levels. As CrowdStrike comes to maturity in revenues and declining y/y growth rates, multiple contraction could be the largest factor in preventing shares from moving higher.\nOverall\nThe cloud-native Falcon platform and its ease of use in remote environments, scalability and robust value proposition combined with the range of modules offered allude to CrowdStrike solidifying its position at the top of the pack within its peers in the long run. The company should maintain status as one of the fastest growing endpoint security firms, reflected within its premium valuation relative to peers. Rising cloud and cybersecurity spend over the next couple of years on a company basis and geographic basis point to positive synergies for revenue and customer growth.\nCrowdStrike has a robust financial picture and a strong growth outlook, with strong earnings leverage on top of significant revenue growth. However, customer-centric and international risks do exist, yet valuation in terms of multiple contraction could be the most important risk to watch, as it could limit returns over the next few years.","news_type":1},"isVote":1,"tweetType":1,"viewCount":1088,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":6,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/349565487"}
精彩评论