Investigating CrowdStrike Holdings's Standing In Software Industry Compared To Competitors

In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing CrowdStrike Holdings CRWD alongside its primary competitors in the Software industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.

CrowdStrike Holdings Background

CrowdStrike is a cloud-based cybersecurity company specializing in next-generation security verticals such as endpoint, cloud workload, identity, and security operations. CrowdStrike's primary offering is its Falcon platform that offers a proverbial single pane of glass for an enterprise to detect and respond to security threats attacking its IT infrastructure. The Texas-based firm was founded in 2011 and went public in 2019.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
CrowdStrike Holdings Inc 838.41 32.57 24.73 2.48% $0.12 $0.64 32.63%
Microsoft Corp 35.24 11.94 12.83 8.93% $33.55 $43.35 17.03%
Oracle Corp 30.55 56.60 6.20 50.61% $5.3 $9.41 7.11%
ServiceNow Inc 76.57 18.16 15.62 4.41% $0.46 $2.08 6.81%
Palo Alto Networks Inc 45.85 21.96 13.84 53.52% $0.21 $1.48 19.33%
Gen Digital Inc 9.06 5.28 3.40 5.96% $0.47 $0.77 1.6%
Dolby Laboratories Inc 42.75 3.34 6.27 2.85% $0.09 $0.28 -5.78%
Qualys Inc 41.03 16.60 11.21 11.75% $0.05 $0.12 10.49%
CommVault Systems Inc 28.65 16.87 5.77 55.72% $0.02 $0.18 2.99%
Teradata Corp 61.05 26.94 2.08 -5.45% $0.06 $0.28 1.11%
N-able Inc 96.69 3.26 5.54 1.35% $0.03 $0.09 13.22%
Progress Software Corp 32.59 4.73 3.16 4.91% $0.06 $0.15 12.46%
SolarWinds Corp 195 1.53 2.55 1.14% $0.07 $0.17 -2.44%
Average 57.92 15.6 7.37 16.31% $3.36 $4.86 6.99%

By carefully studying CrowdStrike Holdings, we can deduce the following trends:

  • The Price to Earnings ratio of 838.41 for this company is 14.48x above the industry average, indicating a premium valuation associated with the stock.

  • It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 32.57 which exceeds the industry average by 2.09x.

  • The stock's relatively high Price to Sales ratio of 24.73, surpassing the industry average by 3.36x, may indicate an aspect of overvaluation in terms of sales performance.

  • With a Return on Equity (ROE) of 2.48% that is 13.83% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

  • Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $120 Million, which is 0.04x below the industry average, potentially indicating lower profitability or financial challenges.

  • Compared to its industry, the company has lower gross profit of $640 Million, which indicates 0.13x below the industry average, potentially indicating lower revenue after accounting for production costs.

  • The company's revenue growth of 32.63% is notably higher compared to the industry average of 6.99%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When assessing CrowdStrike Holdings against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

  • When considering the debt-to-equity ratio, CrowdStrike Holdings exhibits a stronger financial position compared to its top 4 peers.

  • This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.34, which can be perceived as a positive aspect by investors.

Key Takeaways

For CrowdStrike Holdings in the Software industry, the PE, PB, and PS ratios are all high compared to its peers, indicating potentially overvalued stock prices. On the other hand, the low ROE, EBITDA, and gross profit, along with high revenue growth, suggest that the company may be experiencing challenges in generating profits efficiently despite strong revenue growth when compared to industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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