CrowdStrike Holdings (NASDAQ:CRWD) Expects Strong Q1 As Demand For security Solutions Grows

CrowdStrike Holdings (NASDAQ:CRWD) stock has almost doubled since the recent coronavirus induced sell-off but it is still 20% off its all-time highs. 

CrowdStrike leveraging growth in demand for endpoint security solutions

The coronavirus restrictions have meant that more people are staying at home and this has increased the demand for security for a remote working setup. This has helped the cloud-based security company to post strong growth in revenue. In the FY that ended on January 31, the company reported 93% YoY growth in revenue to $481.4 million. In this fiscal year management is expecting revenue to be between $723.3 million and $733.3 million which is 51.3% up at the midpoint range.

The forecasted growth in revenue is impressive and this is due to the efficiency and simplicity of the company’s security solution. The cloud-based solution comprises a software piece that protects mobile devices and computers from anywhere using AI to detect threats. The company is expected to benefit from the increase in demand to secure a remote working environment. Most enterprises have been deploying CrowdStrike’s solutions since the COVID-19 outbreak.

CrowdStrike expects inspiring Q1 results judging from industry performance

The company is expected to release Q1 results on June 2 but judging from recent results of SaaS companies they indicated that the stay at home orders acted as a tailwind in the near term. for instance, Check Point Software Technologies and Fire Eye indicated in their earnings that their cloud-based solutions showed strength amid COVID-19 pandemic. 

The cloud-based endpoint security market has been attracting a considerable number of competitors because of the growth of cloud computing.  It now appears the remote working trend could continue even after coronavirus. CrowdStrike is ranked among the top five providers of endpoint protection solutions in terms of vision completeness and the ability to execute.

CrowdStrike is still unprofitable and last year its losses were $62.6 million. The company is nearing profitability and expects net losses to decrease this year to between $22.1 million and 28.3 million.

About Travis Garlick 1660 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.