Market Overview

CrowdStrike's Premium Metrics Deserve Premium Valuation, Says Bullish UBS

CrowdStrike's Premium Metrics Deserve Premium Valuation, Says Bullish UBS

The bullish case for cybersecurity provider Crowdstrike Holdings Inc (NASDAQ: CRWD) is based on the simple premise that the company's premium metrics deserve a premium valuation, according to UBS.

The CrowdStrike Analyst: Fatima Boolani initiated coverage of CrowdStrike with a Buy rating and $120 price target.

The CrowdStrike Thesis: CrowdStrike's advanced cloud-native and SaaS-based endpoint and workload security platform positions it to take advantage of secular trends, including work from home, cloud adoption and IoT device growth, Bollani said in an initiation note. (See her track record here.)

The company's exposure to fast-growing segments should allow it to sustain a strong 40%-plus compounded annual revenue growth rate through 2022, the analyst said.

Part of the growth could come from the company's success in expanding to adjacent markets like vulnerability and systems management, she said. 

Beyond revenue growth, CrowdStrike should show around eight points of annual operating margin improvement through fiscal 2023 to 10%, Boolani said.

Over the same time period, gross margins should gain 100 basis points, mostly from higher unit and renewal economics, as 70% of revenue comes from the installed base, the analyst said. 

The stock is trading at 22 times EV/S on 2021 estimates and 17 times EV/S on 2022 estimates, which is a premium to established SaaS security rivals, she said. Yet given CrowdStrike's superior growth metrics, a premium valuation is not only justified, but the stock trades at a discount on a growth-adjusted basis, according to UBS. 

CRWD Price Action: Shares of CrowdStrike Holdings were trading higher by 0.44% at $101.33 at last check Friday. 

Related Links:

Remote Workers And The Thieves That Want Their Data

Recognizing And Reducing The Impact Of Auto Cyberattacks

Latest Ratings for CRWD

Sep 2020BTIGMaintainsBuy
Sep 2020JefferiesMaintainsHold
Sep 2020RBC CapitalMaintainsOutperform

View More Analyst Ratings for CRWD
View the Latest Analyst Ratings


Related Articles (CRWD)

View Comments and Join the Discussion!

Posted-In: Cybersecurity Fatima Boolani UBSAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

BIIBRBC CapitalMaintains277.0
RLICompass PointInitiates Coverage On90.0
CSCOWolfe ResearchDowngrades42.0
GILDRBC CapitalMaintains86.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at