[ad_1]
CrowdStrike offered an ambitious roadmap that sent its stock surging more than 12.5% on Thursday. George Kurtz, co-founder and CEO of CrowdStrike, and other company executives presented a multiyear path to growth Wednesday evening during an investor briefing at the company’s Fal.Con event, held this week in Las Vegas. (Falcon is CrowdStrike’s cloud native platform.) Here are the highlights from the deck. CrowdStrike said it expects an expansion of its non-GAAP operating margin from a 21.1% to 21.6% range in fiscal year 2026 to 24% in fiscal 2027. That was in line with analysts’ estimates. Free cash flow (FCF) margin is seen expanding from 27% in its fiscal 2026 fourth quarter to 30%-plus in fiscal year 2027. Estimates were for 30%. This forecast was mentioned on the company’s fiscal 2026 second-quarter earnings call, which was held in late August . At that time, management also raised full-year fiscal 2026 guidance on earnings per share (EPS) but left revenue basically unchanged. CrowdStrike sees fiscal 2027 net new annual recurring revenue (ARR) growth of more than 20% year over year. That also matched the consensus. The company did say formal ARR guidance for fiscal 2027 would be provided alongside fiscal 2026 Q4 results. As of July 31, ARR was up 20% over last year to $4.66 billion. During Wednesday’s presentation, management also provided visibility on certain financial metrics out 10 years. In fiscal 2029 , the company expects operating margin of 28% to 32% and FCF margin of 34% to 38%. Those would be nice increases from current levels. In fiscal 2036 , the company targets $20 billion in ending ARR, a 15% compound annual growth rate (CAGR) from the $10 billion ARR goal for fiscal 2031 . While that ARR forecast is a pretty big jump, long-term investors, like we are at the Club, really appreciate management’s attempt to forecast the out years. The financial optimism comes as CrowdStrike bets on its emerging role in securing artificial intelligence agents — a fast-growing area that creates new vulnerabilities for enterprises. These autonomous AI tools can streamline workflows but also expand the points of attack for hackers. That’s why the rise of AI agents is shaping up to be the next growth catalyst in the cybersecurity industry. To seize on that opportunity, CrowdStrike announced this week an acquisition of Pangea, a startup focused on securing AI agents in what management described as a play to capture a 100-times market opportunity. CrowdStrike sees its total addressable market expanding from $140 billion in calendar year 2026 to $300 billion in calendar year 2030. Jim Cramer has long said cybersecurity is a secular growth industry because data is the new gold, and hackers want their hands all over it. AI is making it easier to attack more often and efficiently with greater sophistication. As a result, the need for cybersecurity is only increasing. That puts CrowdStrike and fellow Club holding Palo Alto Networks in a position where their cyber solutions are a necessity to safeguard against bad actors. That’s clear when we look at CrowdStrike’s near-term and long-term guidance. This tells us our investment thesis on both stocks is alive and thriving. “This is an example of what you want to own,” Jim said on CrowdStrike stock during Thursday’s September Monthly Meeting, reiterating his confidence in Kurtz’s ability to stay ahead of the curve in its fast-paced industry. That said, Jim acknowledged, “CrowdStrike is never going to be cheap,” but suggested the high price-to-earnings multiple is warranted given the cybersecurity giant’s standing as an industry leader with strong growth prospects. The Club continues to maintain our own buy-equivalent 1 rating on CrowdStrike and price target of $520. The stock has gained 47% year to date, trading at $502. Its record-high close of $514 was on July 3. (Jim Cramer’s Charitable Trust is long CRWD, PANW. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
[ad_2]
Source link
