SA Article - CRWD buy, add, & hold…


Last Thursday, CrowdStrike announced the results of its Q1 quarter and the results were really good again.

The revenue numbers are impressive but, unlike what a lot of investors seem to think, CrowdStrike generates a ton of cash, with a free cash flow margin of 39%.

CrowdStrike is a sales machine, to the frustration of competitors like Palo Alto Networks and with the partnership with Zscaler, the sales team is even bigger.

There are still a ton of opportunities left for CrowdStrike. Both its TAM and the number of customers are expected to continue to grow fast.

CrowdStrike is not cheap but if it keeps growing like this, its valuation may be cut in three and it can still be a big winner.


I didn’t notice any mention in the article of the number of outstanding shares.
I checked else where and found 225,800,000.
That is more than the 195,205,000 from a few months ago.

It appears that there is significant share holder dilution underway.
So, while revenues are up; as a shareholder, it’s revenues/share that is more important.



From the earnings releases of the last two quarters the share count was:
236,683,000 in Q4 2021 and
237,363,000 in Q1 2022.

That’s 0.29% dilution in a quarter, or, in other words, nothing. :slight_smile:



Regarding dilution, in its most recent quarter, CRWD showed a 5% increase in shares from the year-ago quarter. In the prior two quarters, share count increased by 7% year over year. This is somewhat typical for these companies. By comparison, MongoDB was 6%, ZS was 4%, DOCU was 6%, OKTA 7%, TEAM 4%. On the other side of things, ZM was 2% and MELI was mostly unchanged (but a bit different kind of company).

There is nothing particularly atypical about CRWD. This is a industry-wide practice. I can live with a company issuing 5-7% new shares each year if they are growing revenue at 50+%.



I should’ve clarified. I always only look at diluted shares.