Laufabble Crowdstrike SA Article

Check this article out. It claims that the fair value of Crowdstike is $20 per share…

CrowdStrike Holdings: Overvalued, Unprofitable Cybersecurity Company With Weaknesses Amid Multiple Headwinds $CRWD, $CYBR, $MIME, $PING, $QLYS, $SAIL, $SPHHF

Then Bert chimes in in the comments:

I am a bit puzzled that the author has chosen to write as he did in the wake of the recent earnings report. Most rationale investors try to look at an EV/S on a forward basis because to do otherwise would completely misrepresent the metric if you are looking at comparables. I think a conservative estimate for 12 month forward revenues is about $710 million. I invite everyone to compute their own EV/S but it is very far from 21X. I confess that I am not a television viewer and so have somehow missed Crowdstrike’s ads. But it might be a reasonable thing for an analyst to try to figure out why the company might be doing lots of advertising. It isn’t to support the stock price-it is to penetrate the SMB market. And it is working-look at the new customer adds which are mostly SMB. With regards to profitability-again, I wonder if the author looked at the numbers this quarter or chose to listen to the conference call. But if not, look at the strong operating cash flow and just how much profitability improved. You will also see that the CFO is talking about the path to sustained profitability on a rather specific but prudent basis. Finally, most analysts are going to look at valuation on a relative and not an absolute basis. If you were to try that exercise, you would find that the average growth rate for a company with an EV/S 5, is about 12%. If you think that CRWD is going to be growing at that rate-well I beg to differ. There are not all that many company’s that are able to grow ARR, the gold standard when it comes to revenue performance for a subscription vendor at 98%. And I really haven’t seen all that many software companies improve their operating margin performance by 3000 basis points in a year. Finally, it might be well for the author not to lump all cyber-security companies together. This company is a major disruptor with unique technology in a space-end-point security that is ripe for disruption given the antiquity of current solutions. That is the reason for the valuation and for the performance. The author is starting from the wrong place in trying to value something using metrics and techniques that do not serve well in the IT world.