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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 (NASDAQ: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 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 | 726.28 | 37.50 | 29.27 | 1.77% | $0.11 | $0.7 | 32.99% |
| Microsoft Corp | 40.40 | 13.69 | 14.71 | 8.93% | $33.55 | $43.35 | 17.03% |
| Oracle Corp | 39.09 | 45.92 | 7.73 | 43.89% | $6.21 | $10.36 | 3.26% |
| ServiceNow Inc | 81.86 | 19.41 | 16.69 | 4.41% | $0.56 | $2.08 | 24.19% |
| Palo Alto Networks Inc | 48.79 | 24.47 | 15.35 | 6.32% | $0.33 | $1.47 | 15.33% |
| Gen Digital Inc | 25.57 | 7 | 4.13 | 5.81% | $0.49 | $0.78 | 2.11% |
| Monday.Com Ltd | 595.71 | 14.21 | 15.38 | 0.85% | $-0.0 | $0.19 | 33.69% |
| Dolby Laboratories Inc | 41 | 3.15 | 6.13 | 4.1% | $0.13 | $0.33 | -3.02% |
| CommVault Systems Inc | 32.55 | 19.21 | 6.56 | 55.72% | $0.02 | $0.18 | 9.74% |
| Qualys Inc | 32.87 | 12.95 | 9.36 | 10.29% | $0.05 | $0.12 | 11.57% |
| Teradata Corp | 80.79 | 60.76 | 1.89 | 21.16% | $0.07 | $0.28 | -2.31% |
| N-able Inc | 98.13 | 3.84 | 6.32 | 1.05% | $0.03 | $0.1 | 13.96% |
| Progress Software Corp | 33.35 | 5.79 | 3.41 | 3.75% | $0.06 | $0.14 | -5.2% |
| SolarWinds Corp | 198.17 | 1.56 | 2.59 | 1.14% | $0.07 | $0.17 | 3.94% |
| Average | 103.71 | 17.84 | 8.48 | 12.88% | $3.2 | $4.58 | 9.56% |
Through a meticulous analysis of CrowdStrike Holdings, we can observe the following trends:
At 726.28, the stock's Price to Earnings ratio significantly exceeds the industry average by 7.0x, suggesting a premium valuation relative to industry peers.
With a Price to Book ratio of 37.5, which is 2.1x the industry average, CrowdStrike Holdings might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
The stock's relatively high Price to Sales ratio of 29.27, surpassing the industry average by 3.45x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 1.77% is 11.11% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million is 0.03x below the industry average, suggesting potential lower profitability or financial challenges.
The company has lower gross profit of $700 Million, which indicates 0.15x below the industry average. This potentially indicates lower revenue after accounting for production costs.
With a revenue growth of 32.99%, which surpasses the industry average of 9.56%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 evaluating CrowdStrike Holdings alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
Compared to its top 4 peers, CrowdStrike Holdings has a stronger financial position indicated by its lower debt-to-equity ratio of 0.31.
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
The high PE, PB, and PS ratios of CrowdStrike Holdings suggest that the company is currently trading at a premium compared to its peers in the Software industry. This may indicate that investors have high expectations for the company's future earnings and growth potential. However, the low ROE, EBITDA, and gross profit, coupled with high revenue growth, indicate that the company may be experiencing challenges in generating profits and operational efficiency. It is important to closely monitor these financial metrics to assess the company's performance relative to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: CRWD
