CrowdStrike (CRWD) stock is enjoying some green days at a time when software stocks are facing existential threats due to AI. The main reason for the optimism is, of course, the recent earnings, but analysts have also come out with positive comments, reassuring investors that things aren’t as bad as many were portraying since last month. Some did revise their target prices lower but maintained a bullish stance on the company’s outlook.
Wedbush analyst Dan Ives maintained the company on the IVES AI 30 list, calling the firm “the gold standard of cybersecurity.” Ives believes the company’s Falcon platform doesn’t face a 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 bullish outlook, impressed by the company’s ability to scale its operations and continue its growth. While these developments are positive, they are made even more attractive thanks to the recent pullback 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 cyberattacks. The company has a significant role to play as AI and AI agents go mainstream. It is headquartered in Austin, Texas.
CRWD stock returned 39% in the last 12 months, while the iShares Cybersecurity and Tech ETF (IHAK) was down 6% during the same period. CrowdStrike enjoys a premium among cybersecurity companies, so it isn’t surprising that it has significantly outperformed its peers.
Despite more than doubling in the last five years, CRWD stock trades at a discount to its five-year average based on various metrics.
For instance, its 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 is trading at a multiple of 52.46x, quite high but still below the five-year average of 65.24x. What’s more, the discount exists despite impressive earnings growth prospects. The company is set to grow its profits by 30.3% in 2027, 27% in 2028, and 31.3% in 2029.
Yes, it is also trading at a forward P/E of 88.26x, but that is expected of a growing company, especially one that is 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. Quite a discount.
