I was doing some modeling on Crowdstrike and estimated EV/S multiples based on growth rate to see where the stock price could hypothetically go to in the coming years.
Specifically, from a revenue perspective, I assumed a pick up in the revenue generated per quarter and accelerating it significantly in year 2020+.
I also assumed some level of shares outstanding appreciation due to stock-based compensation, I might be low or high, and happy to adjust if people have feedback.
I then gave two scenarios, one where EV/S stays the same and the other where it slightly contracts the following year due to slower revenue growth rates (50-60% seems to be around 20-25 these days).
Then I got share prices based off these calculations.
It’s difficult to believe we’ll see multiples expand materially given the “correction” we’re undergoing and I think when you forecast, it’s safer to assume it won’t expand (am I wrong to think this?)
So, given what I modeled out, Crowdstrike will see their share price increase 27% to 44% per year depending on how you play out the multiple and assuming my revenue forecast is even remotely close (Having worked in SaaS, I personally think it’s pretty aggressive to assume the sales org would impose this huge of a pickup in quota/expectations for their AEs every quarter).
What do you all think? (Hopefully this is on-topic since it does talk about a stock that is commonly discussed, the only thing I could see this breaking is: No market predictions of Investor Business Daily or anyone else, which if that is the case, sorry!)
Q1 Q2 Q3 Q4 Revenue % YoY
2017 $38,717.00 $118,752.00
2018 $47,289.00 $55,701.00 $66,379.00 $80,455.00 $249,824.00 110.37%
2019 $96,077.00 $108,108.00 **$120,000.00 $135,000.00 $459,185.00 83.80%**
**2020 $155,622.00 $172,653.00 $189,545.00 $209,545.00 $727,365.00 58.40%**
**2021 $240,167.00 $267,198.00 $294,090.00 $324,090.00 $1,125,545.00 54.74%**
**Bold = Forecasted**
$ YoY Growth Deltas
Q1 Q2 Q3 Q4
2018 $41,738.00
2019 $48,788.00 $52,407.00 **$53,621.00 $54,545.00**
**2020 $59,545.00 $64,545.00 $69,545.00 $74,545.00**
**2021 $84,545.00 $94,545.00 $104,545.00 $114,545.00**
**Bold = Forecasted**
Assuming slight multiple compression in 2020+
Today End of 2019 End of 2020 End of 2021
EV/S 29 29 25 25
Stock Price $47.75 $57.46 $73.33 $106.04
Market Cap $10,850,000,000 $13,316,365,000 $18,184,125,000 $28,138,625,000
Enterprise Value $10,190,000,000 $12,656,365,000 $17,524,125,000 $27,478,625,000
Shares Outstanding 227,225,131 $231,769,634 247,993,508 265,353,053
TTM Revenue $351,019,000 $459,185,000 $727,365,000 $1,125,545,000
Shares Outstanding Increase 2.00% 7.00% 7.00%
Share Appreciation 20.32% 27.62% 44.62%
Assuming similar multiple in 2020+
Today End of 2019 End of 2020 End of 2021
EV/S 29 29 29 29
Stock Price $47.75 $57.46 $85.41 $123.52
Market Cap $10,850,000,000 $13,316,365,000 $21,093,585,000 $32,640,805,000
Enterprise Value $10,190,000,000 $12,656,365,000 $20,433,585,000 $31,980,805,000
Shares Outstanding 227,225,131 $231,769,634 247,993,508 265,353,053
TTM Revenue $351,019,000 $459,185,000 $727,365,000 $1,125,545,000
Shares Outstanding Increase 2.00% 7.00% 7.00%
Share Appreciation 20.32% 48.04% 44.62%