Why Crowdstrike (NASDAQ:CRWD) is a Monster Cybersecurity Stock It's easy to recognize the growth potential in top cybersecurity stocks like Crowdstrike Holdings (NASDAQ: CRWD), as these companies are providing one of the most important services in the entire...

By Sean Sechler

This story originally appeared on MarketBeat

Depositphotos.com contributor/Depositphotos.com - MarketBeat

Innovative platform, high-profile partnerships, and explosive earnings growth make Crowdstrike a top cybersecurity play

It's easy to recognize the growth potential in top cybersecurity stocks like Crowdstrike Holdings (NASDAQ: CRWD), as these companies are providing one of the most important services in the entire tech sector. With so many enterprises pursuing digital transformations, millions of workers handling their tasks remotely, and consumers of today dealing with most of their finances online, it's safe to say that cyber threats are a concern that can impact everyone. The rise of cybercrime has led to plenty of new opportunities for businesses that can help to protect critical data from security compromises, and this trend should only continue in the coming years.

We've already witnessed several recent high-profile cyber attacks which have highlighted the importance of strong cybersecurity platforms, and with the global cybersecurity market size expected to grow at a CAGR of 10.9% from 2021 to 2028, there are plenty of reasons to be bullish on these stocks going forward. Crowdstrike stands out as a monster cybersecurity stock for several reasons, which is why it should be at the top of your shopping list if you are looking for exposure to the industry.

Let's take a deeper look at what makes this company a top cybersecurity play below.

Leverages AI and the Cloud with its Falcon Platform

As technology continues to evolve, cybercriminals are getting more and more skilled at hacking into databases and wreaking havoc on companies with a lot at stake. That's why so many businesses are turning to Crowdstrike to fortify their digital security. The company's Falcon Platform relies on two proprietary technologies to protect workloads across an organization's endpoints in a variety of environments, including on-premise, virtualized, and cloud. It leverages artificial intelligence and cloud computing technology to keep cyber threats at bay, which are two of the most exciting advances in technology today.

Falcon's Lightweight Agent is easy for companies to deploy and consumes 1% or less of CPU while collecting data and events and correlating them with dynamic models to detect potential threats. The Threat Graph is another intriguing component of the Falcon Platform, as it provides an AI-powered dynamic threat database that continuously ingests and contextualizes real-time analytics by correlating across trillions of events. All of this fascinating technology is provided to Crowdstrike customers in a Software-as-a-Service subscription-based model, and the company can take advantage of lucrative cross-selling opportunities once a new client has been added.

Amazon Web Services Partnership & Strong Customer Growth

We know that Crowdstrike's platform is innovative and unique, which has helped the company attract some very high-profile customers. Most recently, Crowdstrike announced new features on its platform that work with services from Amazon Web Services to protect customers from cyber-attacks. Since Amazon Web Services is the largest cloud infrastructure services provider by market share, it's quite impressive that Crowdstrike's Falcon Platform is helping to protect many of Amazon's customers. This is exactly the type of partnership that investors should be excited about, and another reason why Crowdstrike is a top name in the industry.

Crowdstrike is also growing its customer base at a rapid pace, which jumped by 81% year-over-year in Q2. The company had over 13,000 customers as of July 31st, including 63 of the Fortune 100 and 234 of the Fortune 500. The accelerating client growth is great to see for a company that generates recurring revenue from each customer, and the fact that Crowdstrike's platform appeals to businesses of any size in any industry means that it has a massive addressable market.

Explosive Earnings Growth Amidst Strong Cybersecurity Demand

When certain factors are at play that benefits an entire industry like we are currently seeing with cybersecurity, investors want to see a company take full advantage of the circumstances. That's certainly the case for Crowdstrike, as the company has been delivering explosive earnings growth over the last few quarters. Crowdstrike reported revenue growth of 93% in FY 2020, revenue growth of 82% in FY 2021, and has already gotten off to a hot start in FY 2022.

In Q2, the company reported a record net new ARR of $151 million, grew ending ARR 70% year-over-year to exceed $1.34 billion, and added a record 1,670 net new subscription customers in the quarter. This is important as it confirms the company's growth strategy is working well and that the demand for Crowdstrike's products remains strong. The company also increased its forward guidance for the fiscal year 2022, which means that more good things are likely coming for investors in upcoming quarters thanks to such a favorable market environment.

Wavy Line

Editor's Pick

A Leader's Most Powerful Tool Is Executive Capital. Here's What It Is — and How to Earn It.
Lock
One Man's Casual Side Hustle Became an International Phenomenon — And It's on Track to See $15 Million in Revenue This Year
Lock
3 Reasons to Keep Posting on LinkedIn, Even If Nobody Is Engaging With You
Why a Strong Chief Financial Officer Is Crucial for Your Franchise — and What to Look for When Hiring One

Related Topics

Business News

More Americans Are Retiring Abroad, Without a Massive Nest Egg — Here's How They Made the Leap

About 450,000 people received their social security benefits outside the U.S. at the end of 2021, up from 307,000 in 2008, according to the Social Security Administration.

Business News

7 of the 10 Most Expensive Cities to Live in the U.S. Are in One State

A new report by U.S. News found that San Diego is the most expensive city to live in for 2023-2024, followed by Los Angeles. New York City didn't even rank in the top 10.

Growing a Business

The Best Way to Run a Business Meeting

All too often, meetings run longer than they should and fail to keep attendees engaged. Here's how to run a meeting the right way.

Fundraising

Working Remote? These Are the Biggest Dos and Don'ts of Video Conferencing

As more and more businesses go remote, these are ways to be more effective and efficient on conference calls.

Business News

Woman Ties the Knot at White Castle Almost 30 Years After the Chain Gave Her Free Food as a Homeless Teen

Jamie West was just 12 years old when she ran away from the foster care system.