CRWD

CrowdStrike has been expanding its security solution suite for over 10 years and is one of the most talked-about companies in the cybersecurity industry.

In 2023, CrowdStrike was recognized as a leader for the 4th consecutive time in Gartner's 2023 Magic Quadrant in the endpoint protection sector, with the highest scores for vision and execution integrity. Additionally, according to the Forrester Wave Report for the first quarter of 2024, CrowdStrike was chosen as the leader in cloud workload security, ranking highest in the strategic aspect among all vendors and achieving the highest scores for vision and innovation. Despite the growing list of industry accolades, the company still needs to continue its business, and it may take time before it joins the ranks of the ultra-rich.

In the 2024 fiscal year (ending January 31), CrowdStrike generated a revenue of 3 billion 60 million dollars.Revenue-to-price ratio (P/S)is about 24. Assuming P/S remains constant, CrowdStrike needs to increase its revenue to the next level. Approximately 42 billion dollars annually to support a $1 trillion market cap. By the way, Wall Street predicts revenues of 3.970 billion dollars for the fiscal year 2025 and 5.030 billion dollars for the fiscal year 2026, so achieving such a scale of revenue is still in the distant future.

If the company can maintain a growth rate of 33% year-on-year, CrowdStrike may reach a market capitalization of 1 trillion dollars by 2033. However, sustaining that level of growth for 10 years will be extremely challenging. By reducing the average revenue growth rate to a more modest 27%, CrowdStrike may reach a market capitalization of 1 trillion dollars by 2035.

There are reasons to believe that the need for powerful cybersecurity solutions will continue. According to data compiled by McKinsey & Company, cyber attacks are expected to reach $10.5 trillion in damages by 2025, a 300% increase over the past 10 years. The target market for security solutions is expected to increase dramatically from around $1.5 trillion to $2 trillion over the next 20 years, about 10 times the current market size.

If CrowdStrike can capture even a small portion of its growing market opportunities, it has the potential to quickly join the 1 trillion dollar club.