CrowdStrike: Positive setup for 2025
Platform consolidation continues despite the July 19 outage, with CrowdStrike demonstrating its quality to investors and customers.
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For those who are new to Outperforming the Market, I think it is worthwhile to share what we have done with the CrowdStrike CRWD 0.00%↑ position when the July 19 outage occurred.
Before the July 19 outage, CrowdStrike was a small position in the portfolio. I liked the quality of the company and its management team, but the valuation always reflected its superior growth profile and competitive position.
However, about 80% of the CrowdStrike position you see in the portfolio today was added on 7 and 8 August 2024 after the outage.
Conviction in CrowdStrike after in-depth research and understanding of the company, along with patience for a sell-off resulted in the solid gains we have for CrowdStrike today.
When sentiment and valuation is overly depressed, this creates excellent contrarian opportunities for investors that have put in the work.
Despite headwinds and a pause in pipeline generation at the start of the FY3Q25 quarter after the July 19 outage, CrowdStrike has executed well to achieve results this quarter that many other companies would have dreamed of.
In my view, performance was better than feared for a quarter that followed an outage of unprecedented magnitude with a pause in selling activity in the weeks after the outage, elongation of sales cycles, and impact of customer commitment packages during the quarter.
The volatility near-term is likely due to a reflection of a significant amount of variance with regard to investor expectations, as visibility remains relatively limited with regard to the impact of the customer commitment packages, and management commentary skews conservative.
As I will explain in the article below, I think that the setup for CrowdStrike looks positive for 2025, and today in this article, this is what I will be going through:
Business review after FY3Q25
Outlook for CrowdStrike for next year
Falcon Flex acceleration
Platform consolidation and platform acceleration
Signs of improving business activity
Valuation of CrowdStrike
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