Crowdstrike Channel Check

[bulwnkl]

All,
BTIG securities downgraded Crowdstrike and it fell about 4.5% today. Normally, I don’t care about analyst downgrades. I think that they are mostly a trailing indicator, but this downgrade is based on a channel check. I share the concern that others have that Palo Alto Networks may have a good enough solution that they can sell to their much larger customer base (80,000) compared to CrowdStrike’s customer base (9,896).

Because of those concerns, I reduced my allocation of CrowdStrike from about 25% to about 11.5% 2 months ago. It’ll be interesting to see if the growth is slowing. I am still cautiously optimistic about CRWD. George Kurtz, CrowdStrike’s CEO, mentioned that companies have reduced insurance rates if they use CRWD services when interviewed by Jim Cramer. I don’t now if Palo Alto Networks can say the same. It’ll be interesting, and the devil is in the details with a channel check. I guess we’ll have to wait for the earnings on 12/2 to get more color on this.

Best,

bulwnkl

https://www.barrons.com/articles/crowdstrike-stock-competiti…

[rdgyy]

Hi bulwnkl,

Crowdstrike main competitor is SentinelOne, and both companies are going mostly after the incumbent/legacy players like McAfee, Symantec, Trend Micro, etc - and these companies have a large number of clients some in the ~100k range. Crowdstrike has 13,080 clients not 9k as per their latest earning call and are targeting to get to at least 100k from here.

I’ve posted here before that S is a competitor that we need to pay attention to, and not to invest in the company necessarily but due to their potential to put pressure on CRWD sales and margin.

[bulwnkl]

Hi rdgyy,
I am aware of SentinelOne, but Palo Alto Networks may be a concern as well. Apologies on the subscription number, you’re right. My notes were a bit dated, and your notes match the last earnings report.

Yes. I am concerned about both SentinelOne AND Palo Alto Network, who’s also entered the endpoint solution area.

Best,

bulwnkl