CrowdStrike (CRWD) stock is enjoying a greener day at a time when software stocks are facing existential threats due to AI. The main reason for optimism is, of course, the latest earnings, but analysts have also come out with positive comments, assuring investors that things are not as bad as many have portrayed since last month. Some lowered their target prices but maintained a bullish stance on the company’s outlook.
Wedbush analyst Dan Ives kept the company on the IVES AI 30 list, calling the company “the gold standard of cybersecurity.” Ives believes the company’s Falcon platform is not under threat from AI. Instead, it becomes even more relevant in today’s AI threat landscape. Evercore was more or less neutral, calling the company’s performance in line with expectations. Morgan Stanley maintained a positive outlook, impressed by the company’s ability to scale its operations and continue to grow. While these developments are positive, they are made all the more compelling by the recent rebound in stock prices.
CrowdStrike is known for its Falcon Platform, a cloud-native cybersecurity platform that uses AI and machine learning to detect and thwart cyber attacks. The company has an important role to play in the mainstreaming of AI and AI agents. It is headquartered in Austin, Texas.
CRWD stock has returned 39% over the past 12 months, while the iShares Cybersecurity and Tech ETF (IHAK) has declined 6% during the same period. CrowdStrike enjoys a premium among cybersecurity companies, so it’s no surprise that it has significantly outperformed its peers.
Despite doubling over the past five years, CRWD stock is trading at a discount to its five-year average based on various metrics.
For example, the forward price-to-book ratio of 19.15x is significantly lower than the five-year average of 30.22x. On a forward price-to-cash-flow basis, it trades at a multiple of 52.46x, very high but still below the five-year average of 65.24x. What’s more, the discount comes with impressive revenue growth prospects. The company will grow 30.3% in 2027, 27% in 2028 and 31.3% in 2029.
Yes, it also trades at a forward P/E of 88.26x, but it’s expected to be a growing company, especially one that’s a class above the rest. What’s more, this forward P/E is still less than half of the five-year average forward P/E of 193x. Substantial discount.
