Will CrowdStrike Shares Continue to Climb in 2025?
In a bold move, cybersecurity giant CrowdStrike has set its sights on reaching an impressive $10 billion in Annual Recurring Revenue (ARR) by fiscal 2031, a 127% growth from its current ARR of around $4.4 billion. This ambitious target, if achieved, could drive significant returns for investors.
The company's confidence stems from its robust growth, strong customer base, and the expanding cybersecurity market. CrowdStrike recently surpassed the $4 billion ending ARR milestone with a 27% year-over-year growth rate, demonstrating its momentum.
The Falcon Flex subscription model and accelerating module adoption, including substantial contract expansions by large clients, are key growth drivers. The high gross retention rate of over 97% reflects strong customer loyalty and minimal churn, further bolstering CrowdStrike's growth prospects.
Despite a temporary setback caused by the major Falcon outage in 2023, which affected 8.5 million customer computers, CrowdStrike's management remains confident in sustained growth without long-term negative impact. To mitigate the impact, CrowdStrike offered customer choice packages, including discounted Flex subscriptions.
CrowdStrike's Falcon platform, a true all-in-one cybersecurity solution, relies heavily on artificial intelligence (AI) and is 98% accurate when it comes to triaging threats. The platform uses a cloud-based architecture, providing scalability and flexibility.
The company's stock is currently trading at a record high, but its price-to-sales ratio (P/S) is 29.1, making it more expensive than its peers in the AI cybersecurity space. However, those who can hold onto CrowdStrike's stock for the next six years and beyond may still have a solid investment opportunity.
CrowdStrike's new subscription option, Flex, launched in 2023, offers customer choice packages. The introduction of Charlotte AI, a virtual assistant, has also been a game-changer, saving managers more than 40 hours per week on average.
The company's estimated addressable market is currently $116 billion and is expected to more than double to $250 billion over the next few years. This suggests ample runway for expansion, making CrowdStrike one of the world's biggest cybersecurity companies with significant long-term revenue growth potential.
With its evolving Falcon platform, business model innovation, and commitment to customer satisfaction, CrowdStrike is well-positioned to capitalise on the rapidly growing cybersecurity market, making its $10 billion ARR goal a realistic ambition.
- The growing cybersecurity market, coupled with CrowdStrike's robust growth, strong customer base, and innovative Falcon Flex subscription model, could potentialy attract investors looking for significant returns.
- With the expanding market and CrowdStrike's demonstrated momentum, as evident by a 27% year-over-year growth rate, the company's goal of reaching $10 billion ARR by fiscal 2031 becomes a plausible investing prospect.
- CrowdStrike's Falcon platform, leveraging AI technology and a cloud-based architecture for scalability, could make it an attractive investment option for those interested in data-and-cloud-computing and technology-oriented stocks.
- affected by the temporary setback due to the Falcon outage in 2023, CrowdStrike's long-term growth potential remains promising, especially as the company's addressable market is expected to more than double to $250 billion over the next few years.
