CrowdStrike stock skyrockets, beating out Palo Alto in cybersecurity

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TLDR:

• CrowdStrike is a leading firm in AI-powered cybersecurity with impressive financial results.
• Although it trades at a higher multiple than Palo Alto Networks, both firms are seen as fair value.

CrowdStrike, a technology firm specializing in AI-powered cybersecurity, has experienced significant share price growth and is now the 8th largest software company in the US. The firm’s core offering is the Falcon platform, which uses AI to detect and prevent cyber threats. CrowdStrike has shown stellar financial performance, with a 30% compound annual growth rate in net income over the past three years and has the highest net income margin and gross profit margin in its history. The firm has also decreased its total debt-to-equity ratio and reported a 33% increase in annual recurring revenue. Wall Street analysts see both CrowdStrike and its rival, Palo Alto Networks, as fairly valued, with CrowdStrike trading at a higher forward price-to-earnings multiple but with expected earnings per share growth higher than Palo Alto. Both firms have a history of beating earnings expectations, with CrowdStrike posting an average earnings surprise of 16% over the past four quarters.

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