CrowdStrike currently trades at $503.54 and has been a dream stock for shareholders. It’s returned 274% since October 2020, nearly tripling the S&P 500’s 94.8% gain. The company has also beaten the index over the past six months as its stock price is up 36.7% thanks to its solid quarterly results.
Is now still a good time to buy CRWD? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it’s free for active Edge members.
Why Are We Positive On CrowdStrike?
Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ:CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.
1. Billings Surge, Boosting Cash On Hand
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
CrowdStrike’s billings punched in at $1.23 billion in Q2, and over the last four quarters, its year-on-year growth averaged 25%. This performance was fantastic, indicating robust customer demand. The high level of cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth. 
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect CrowdStrike’s revenue to rise by 21.6%. While this projection is below its 28.2% annualized growth rate for the past two years, it is healthy and implies the market is baking in success for its products and services.
3. Customer Acquisition Costs Are Recovered in Record Time
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
CrowdStrike is quite efficient at acquiring new customers, and its CAC payback period checked in at 31.9 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a strong brand reputation, giving it more resources pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments. 
Final Judgment
These are just a few reasons CrowdStrike is a high-quality business worth owning, and with its shares outperforming the market lately, the stock trades at 23.9× forward price-to-sales (or $503.54 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More Than CrowdStrike
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