A 10-month slump and technical bear market ended in October 2022 for the S&P 500 index. In January 2024, the index reached a new record high after more than a year. It was the last obstacle the S&P 500 had to pass before investors recognized the new bull market.
Several high-quality equities are near all-time highs, but it's still time to purchase. They include CrowdStrike (NASDAQ: CRWD). It's a prominent AI-powered cybersecurity company, and its stock is rising after strong financial results.
Malicious actors use generative AI to quickly create realistic content to trick huge organization personnel into giving up crucial information. AI alone increased phishing emails tenfold in the last year, according to Palo Alto Networks.
Employees are the most vulnerable aspect of any firm because to their regular email, phone, and messaging contacts. CrowdStrike claims 90% of successful assaults start at the endpoint—the computer or device workers use daily.
Because it's impossible for every employee to be a security specialist, CrowdStrike's AI method is excellent for automated cyber protection. Its models are trained on massive data, including 2 trillion daily security events. CrowdStrike analyzes malicious actors' intent with 180 million indicator-of-attack decisions every second. Without AI, processing so much volume is impossible.
CrowdStrike's Falcon platform goes beyond endpoints. It offers enterprises a complete solution including cloud security, identity security, and exposure control features. Most CrowdStrike clients (64%) used at least five Falcon modules in the fiscal 2024 fourth quarter (ended Jan. 31).
CrowdStrike also reported that eight module users increased from a year ago, demonstrating how corporate needs are expanding. CrowdStrike brought in a record $3 billion in fiscal 2024 (ending Jan. 31), up 36% over 2023. The company might increase by more than 30% in fiscal 2025, with about $4 billion in revenue at management's high end.
CrowdStrike's profitability may be more important. In fiscal 2024, the corporation earned $89.3 million, a big improvement from its $183.2 million net deficit the year before. CrowdStrike's year-over-year non-GAAP net income rose 104% to $751.7 million. That statistic excludes one-time and noncash expenses like stock-based compensation to show investors CrowdStrike's true profitability.
The difficult economic environment is showing investors that most technology businesses are exceptional at growing quickly, but few can maintain significant growth when they limit their spending to generate a profit. CrowdStrike stock rises more than 400% in five years and is reaching an all-time high, but its long-term financial prognosis shows it's not too late to buy into this growth story.
It concluded fiscal 2024 with $3.4 billion in annual recurring revenue (ARR), which represents the estimated future value of existing subscriptions. Management wants to reach $10 billion in five to seven years. If CrowdStrike meets its ARR objective, it will only be a small part of its $225 billion total addressable market for fiscal 2028.
CrowdStrike has a market valuation of $80 billion and a P/S ratio of 26.2 based on fiscal 2024 revenue. Compared to other cybersecurity companies, Palo Alto Networks stock has a P/S ratio of 13.8. However, the stock market looks ahead. CrowdStrike stock may be a bargain if management's seven-year expectations are right.
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