Back from a brief hiatus, in this video, I take a look at Crowdstrike (CRWD), one of the dominant and fastest-growing cybersecurity companies in the world. Their historic growth rate and free cash flow suggest they're potentially UNRIVALED, but after the recent outage and 30% stock sell-off, is now the time to pull the trigger? I'm skeptical, as there are cybersecurity companies trading at lower valuations and growing faster, and I personally think there are better stocks to buy right now. For more, check out www.unrivaledinvesting.com. If you liked the research tool I used in this video, you can get the first month free at www.aitickerchat.com.
Is your subscription also per month basis ? What you will get in month time as services. I am following you sinds very long, and love to watch your analysis
My offerings are Quarterly, Annual and Premium (for direct interaction on our exclusive Discord). Each month I aim to have an exclusive overview video of key market themes, stocks I find interesting today, and nearly each week has a portfolio update where I either talk about stocks I own, or stocks I'm looking at that I think are interesting. None of which is advice, but sharing my own journey with some education along the way.
I am old enough to remember how many companies came and went away in this sector. The once giants Norton, Avira, Panda, Kasperski, McAfee and so many more have gone and the same will happen to Crowdstrike. These companies don't have a future because this is a sector that nothing depends on them. Once Microsoft, Google, Amazon and Apple come up with a new cycle of operating systems that have security patches for the vulnerabilities Crowdstrike covers now. Newer companies will emerge to protect the whatever vulnerabilities of the future. It's very easy to enter this sector and as fast as you grow, similarly fast you eclipse. Ignorance and market exuberance have given premium PE values to this sector. What happened last week is only a wake up call and a reminder that there is no MOAT in cybersecurity. What you build for 10 years goes down on a Friday afternoon.
Good take. I would say their reputation is in tatters. Governments are stepping in directly as it’s impacted their national economy. Looking forward, we can expect: 1. Lawsuits from customers, governments and Microsoft. 2. Many CIOs are going to get fired for choosing CrowdStrike. 3. IT teams now understand the risk deploying CrowdStrike. No way they are going to expand the foot print. In few quarters, I expect enterprises to rollback. This is not sticky as projected. 4. Competitors are going to step in including Microsoft defender product for endpoints which competes with CrowdStrike. 5. Microsoft is going to block driver access and prevent backdoor entries for CrowdStrike. 6. CEO head is likely to roll. This is a disaster. Don’t get in.
Some valid points. I think the reputation would be in tatters if it was a cyber attack, like Okta getting hacked. Given that their platform is considered best in breed as shown by more industry awards than any other software vendor. Some culpability on MSFT as this didn't happen on IOS, For all that was made of this it impacted less than 1% of all windows machines. Terms of service, and insurance likely reduce the burden. Not much direct competition as indicated by their market share, and the outage doesn't discount the effectiveness of the cyber security offering. We will see in 5 years. Some other great names as well like ZS and CYBR, but none in endpoint protection.
Absolutely on point. If I was a CIO customer, I would definitely question how a cybersecurity company I'm using to avoid downtime is CAUSING my downtime. This is no better than if I was being attacked by a virus and got the 'blue screen of death' from that virus. This definitely doesn't bode well for their PR. And competitors would use this against them for sure. And as you said, only compelling reason to buy is if the valuation is low enough. Thanks for the analysis to show that it's not. 👍
If this didn't get caught in testing, it makes you wonder if they do any testing? How much gets pushed out that doesn't get noticed, but are bad updates? Any software person will say this isn't just an issue that they broke something once, rather, they have a core procedural issue with their testing and deployments. I expect people getting fired.
No different take, just wanted to add that not Crowdstrike, but Microsoft is the market leader for security software. Also note that Crowdstrike's software has to run on the kernel level of an operating system. Granting anything permission to run on a kernel level is a security risk in itself. My take therefore is that Microsoft, being the developer of the OS, is the obvious beneficiary. Its product is called Defender for Endpoint. Not saying you should invest in MSFT because of this incident, it does not move the needle for MSFT.
Forward PE 60, the current risks of law suits and the loss of reputation. No chance to keep the stock price on this level. Bigger investors will take each rebound as a chance to sell their positions
Good Analysis…👍🏼 I want to buy this falling knife, but it can easily keep dropping as lawsuits should be forthcoming. Also…That Price/Sales Ratio is way too rich when compared to their competitors. That could mean a good old fashioned haircut is in the near future.
I agree I think that the price is likely to continue to fall, however the only name on that list that is a direct competitor is Sentinel one. The others are cyber security but offer different services. 127% CAGR free cash flow growth over the last 5 years with 75% gross margins and 30+ free cash flow margins. Also CYBR, PNW, and ZS all leaders in different segments.
See the book "Titan" on your shelf behind you. I read that years ago and believe it is one of the best books ever written. The level of research is astounding.
Back from a brief hiatus, in this video, I take a look at Crowdstrike (CRWD), one of the dominant and fastest-growing cybersecurity companies in the world. Their historic growth rate and free cash flow suggest they're potentially UNRIVALED, but after the recent outage and 30% stock sell-off, is now the time to pull the trigger? I'm skeptical, as there are cybersecurity companies trading at lower valuations and growing faster, and I personally think there are better stocks to buy right now. For more, check out www.unrivaledinvesting.com. If you liked the research tool I used in this video, you can get the first month free at www.aitickerchat.com.
Is your subscription also per month basis ?
What you will get in month time as services. I am following you sinds very long, and love to watch your analysis
My offerings are Quarterly, Annual and Premium (for direct interaction on our exclusive Discord). Each month I aim to have an exclusive overview video of key market themes, stocks I find interesting today, and nearly each week has a portfolio update where I either talk about stocks I own, or stocks I'm looking at that I think are interesting. None of which is advice, but sharing my own journey with some education along the way.
Dont buy Clownstrike
Glad to have you back 😀
I am old enough to remember how many companies came and went away in this sector. The once giants Norton, Avira, Panda, Kasperski, McAfee and so many more have gone and the same will happen to Crowdstrike. These companies don't have a future because this is a sector that nothing depends on them. Once Microsoft, Google, Amazon and Apple come up with a new cycle of operating systems that have security patches for the vulnerabilities Crowdstrike covers now. Newer companies will emerge to protect the whatever vulnerabilities of the future. It's very easy to enter this sector and as fast as you grow, similarly fast you eclipse. Ignorance and market exuberance have given premium PE values to this sector. What happened last week is only a wake up call and a reminder that there is no MOAT in cybersecurity. What you build for 10 years goes down on a Friday afternoon.
Thst upside down bird photo was funny as hell
Glad you enjoyed it!
Just waiting to buy as it start to recover
Good take. I would say their reputation is in tatters. Governments are stepping in directly as it’s impacted their national economy.
Looking forward, we can expect:
1. Lawsuits from customers, governments and Microsoft.
2. Many CIOs are going to get fired for choosing CrowdStrike.
3. IT teams now understand the risk deploying CrowdStrike. No way they are going to expand the foot print. In few quarters, I expect enterprises to rollback. This is not sticky as projected.
4. Competitors are going to step in including Microsoft defender product for endpoints which competes with CrowdStrike.
5. Microsoft is going to block driver access and prevent backdoor entries for CrowdStrike.
6. CEO head is likely to roll.
This is a disaster. Don’t get in.
Very reasonable key points! Throw in an ugly valuation... not good!
Some valid points. I think the reputation would be in tatters if it was a cyber attack, like Okta getting hacked. Given that their platform is considered best in breed as shown by more industry awards than any other software vendor. Some culpability on MSFT as this didn't happen on IOS, For all that was made of this it impacted less than 1% of all windows machines. Terms of service, and insurance likely reduce the burden. Not much direct competition as indicated by their market share, and the outage doesn't discount the effectiveness of the cyber security offering. We will see in 5 years. Some other great names as well like ZS and CYBR, but none in endpoint protection.
No CIO is going to get fired. CS had a solid reputation and it was an unpredictable event.
It's going lower as there's 1 billion maybe more of losses. They'll be sued for years and many low EPS quarters.
Crowdstrike: a premonition in the name 😮
Absolutely on point. If I was a CIO customer, I would definitely question how a cybersecurity company I'm using to avoid downtime is CAUSING my downtime. This is no better than if I was being attacked by a virus and got the 'blue screen of death' from that virus. This definitely doesn't bode well for their PR. And competitors would use this against them for sure. And as you said, only compelling reason to buy is if the valuation is low enough. Thanks for the analysis to show that it's not. 👍
❤ great Video. Looking forward to the unrivaled letter 🎉
If this didn't get caught in testing, it makes you wonder if they do any testing? How much gets pushed out that doesn't get noticed, but are bad updates? Any software person will say this isn't just an issue that they broke something once, rather, they have a core procedural issue with their testing and deployments. I expect people getting fired.
No different take, just wanted to add that not Crowdstrike, but Microsoft is the market leader for security software. Also note that Crowdstrike's software has to run on the kernel level of an operating system. Granting anything permission to run on a kernel level is a security risk in itself. My take therefore is that Microsoft, being the developer of the OS, is the obvious beneficiary. Its product is called Defender for Endpoint. Not saying you should invest in MSFT because of this incident, it does not move the needle for MSFT.
Forward PE 60, the current risks of law suits and the loss of reputation. No chance to keep the stock price on this level. Bigger investors will take each rebound as a chance to sell their positions
Looks like a market over reaction. I will be buying.
Yikes, if it happens again they are toast. Thats hella risk for a currently overpriced stock
Could you do one on Lululemon? It’s quietly made 52 week lows 🧐
Definitely in the cue!
Good Analysis…👍🏼 I want to buy this falling knife, but it can easily keep dropping as lawsuits should be forthcoming.
Also…That Price/Sales Ratio is way too rich when compared to their competitors. That could mean a good old fashioned haircut is in the near future.
That's my view, but we'll see!
I agree I think that the price is likely to continue to fall, however the only name on that list that is a direct competitor is Sentinel one. The others are cyber security but offer different services. 127% CAGR free cash flow growth over the last 5 years with 75% gross margins and 30+ free cash flow margins. Also CYBR, PNW, and ZS all leaders in different segments.
Did Microsoft verify Crowd strikes software testing procedures before allowing them access to the Windows Kernel?
welcome back man!
Thank you for watching! Glad to be back.
The brand icon of crowdstrike shows the direction of the stock until the damage is more clear.
I'm lucky that I'm invested in SENTINELONE and not CROWDSTRIKE. Wouldn't be sure how to act.
What’s your view about Fairfax buying sleep country?
Great question. Will discuss in this week's exclusive letter!
Missed your great videos, Daniel!
Thank you, more to come!
Linux machines were impacted also twice in the prior weeks afaik
See the book "Titan" on your shelf behind you. I read that years ago and believe it is one of the best books ever written. The level of research is astounding.
That's 100% right. I'm thinking about rereading it and sharing some of the lessons in an exclusive video for subscribers in the months ahead.
Liability in contract and tort could wipe out the company. Wait for the class actions. Court sanctioned bankruptcy thereafter, is not unrealistic.
Have you ever put out a video about a good opportunity?
All the time. Here's one from earlier this year: ruclips.net/video/nsxGizwLTd8/видео.html
One video is not all the time.
Finally back ;-)
Thanks for watching! Glad to be back ;)
I bought at $150 last June. Sold at $350 this year.
What’s that mystery company haha
I'll give you a hint, they had significant insider buying in the last few quarters. I discuss more at www.unrivaledinvesting.com ;)
Must be Sofi :)
Maybe it’ll go bankrupt?