Analyst Note| Mark Cash |
We are maintaining our $175 fair value estimate after narrow-moat CrowdStrike’s investor briefing. Our main takeaway is that CrowdStrike is in the very early stages of disrupting the endpoint and workload security markets, and that secular and company-specific tailwinds will propel robust growth throughout this decade. CrowdStrike laid out plans to triple its annual recurring revenue, or ARR, to $3 billion, which we expect to be achievable in fiscal year 2024 (management did not explicitly guide, but illustrated the path to $3 billion in ARR in fiscal year 2025). The long-term target model now contains at least 20%-22% in adjusted operating margin (up from 20%-plus) and at least 30% free cash flow margin.