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In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing CrowdStrike Holdings (NASDAQ:CRWD) alongside its primary competitors in the Software industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to investors and shed light on company's performance within the industry.
CrowdStrike is a cloud-based cybersecurity company specializing in next-generation security verticals such as endpoint, cloud workload, identity, and security operations. CrowdStrike's primary offering is its Falcon platform that offers a proverbial single pane of glass for an enterprise to detect and respond to security threats attacking its IT infrastructure. The Texas-based firm was founded in 2011 and went public in 2019.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| CrowdStrike Holdings Inc | 763.89 | 29.67 | 22.54 | 2.48% | $0.12 | $0.64 | 32.63% |
| Microsoft Corp | 36.09 | 12.45 | 13.09 | 9.53% | $33.39 | $42.4 | 17.58% |
| Oracle Corp | 30.31 | 56.15 | 6.15 | 50.61% | $5.3 | $9.41 | 7.11% |
| ServiceNow Inc | 84.79 | 19.22 | 16.36 | 3.98% | $0.51 | $1.92 | 25.62% |
| Palo Alto Networks Inc | 42.99 | 20.59 | 12.97 | 53.52% | $0.21 | $1.48 | 19.33% |
| Gen Digital Inc | 9.28 | 5.40 | 3.48 | 5.96% | $0.47 | $0.77 | 1.6% |
| Dolby Laboratories Inc | 40.72 | 3.19 | 5.97 | 2.85% | $0.09 | $0.28 | -5.78% |
| Qualys Inc | 40.58 | 16.43 | 11.09 | 11.75% | $0.05 | $0.12 | 10.49% |
| Teradata Corp | 59.56 | 26.29 | 2.03 | -5.45% | $0.06 | $0.28 | 1.11% |
| N-able Inc | 93.77 | 3.17 | 5.37 | 1.35% | $0.03 | $0.09 | 13.22% |
| Progress Software Corp | 32.50 | 4.72 | 3.16 | 4.91% | $0.06 | $0.15 | 12.46% |
| Average | 47.06 | 16.76 | 7.97 | 13.9% | $4.02 | $5.69 | 10.27% |
Through a detailed examination of CrowdStrike Holdings, we can deduce the following trends:
The current Price to Earnings ratio of 763.89 is 16.23x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 29.67 which exceeds the industry average by 1.77x.
The stock's relatively high Price to Sales ratio of 22.54, surpassing the industry average by 2.83x, may indicate an aspect of overvaluation in terms of sales performance.
The company has a lower Return on Equity (ROE) of 2.48%, which is 11.42% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $120 Million, which is 0.03x below the industry average, potentially indicating lower profitability or financial challenges.
With lower gross profit of $640 Million, which indicates 0.11x below the industry average, the company may experience lower revenue after accounting for production costs.
The company's revenue growth of 32.63% exceeds the industry average of 10.27%, indicating strong sales performance and market outperformance.
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By considering the Debt-to-Equity ratio, CrowdStrike Holdings can be compared to its top 4 peers, leading to the following observations:
CrowdStrike Holdings is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.34.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
For CrowdStrike Holdings in the Software industry, the PE, PB, and PS ratios are all high compared to peers, indicating potentially overvalued stock. The low ROE, EBITDA, and gross profit suggest lower profitability levels compared to industry peers. However, the high revenue growth rate indicates strong potential for future growth compared to competitors in the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: CRWD
