Wall Street tried to digest the news Friday that cybersecurity firm CrowdStrike Holdings (CRWD) expects its partnership with cloud computing giant Amazon Web Services to help it triple the company’s recurring revenue over the next four years. CrowdStrike stock has swooned after a big gain in 2020.
At a virtual investor conference on Thursday, CrowdStrike said it aims to grow annual recurring revenue, or ARR, to $3 billion by 2025, up from an estimated $1 billion in 2021.
“The company believes its partnership with AWS positions it to move beyond endpoint and further penetrate cloud workload security,” Jefferies analyst Brent Thill said in a report to clients. “ARR transacted through this channel grew 650% year over year to over $50 million as AWS has improved its marketplace experience.”
As Microsoft (MSFT) expands its security offerings, a growing number of cybersecurity firms have turned to AWS, part of Amazon.com (AMZN), as a cloud partner. Microsoft, meanwhile, has gained share in cloud services.
CrowdStrike stock rose 4.9% on Thursday amid the investor day. But it pulled back 0.4% to close at 202.68 on the stock market today.
CrowdStrike Stock: More Than An Endpoint Security Provider
The company uses machine learning, one form of artificial intelligence, and a specialized database to detect malware on laptops, mobile phones and other devices that access corporate networks.
CrowdStrike has broadened its offerings through acquisitions. It recently bought Humio for $392 million in cash and stock. Humio sells cloud-based network monitoring tools.
Earlier, CrowdStrike acquired Preempt Security for $96 million.
“Management remains bullish on its ability to add customers at a rapid rate and sell more modules into a growing base that looks for CrowdStrike to protect an increasingly complex threat landscape,” said RBC Capital analyst Matthew Hedberg in a report.
Shares Pop On Remote Work Increase
Meanwhile, the CrowdStrike stock initial public offering in June 2019 raised $659 million. CrowdStrike popped in 2020 as remote work increased demand for endpoint security.
In addition, Shares hit an all-time high of 251.28 on Feb. 16. Amid a swoon in software growth stocks, CrowdStrike stock retreated 33%, hitting a low of 168.67 on March 5.
Also, CrowdStrike stock needs to forge a new base to become actionable. Shares have clawed back to CrowdStrike’s 50-day moving average.
Meanwhile, CrowdStrike stock is just one of many cybersecurity companies to watch. According to IBD Stock Checkup, the Computer-Software Security group ranks a weak No. 149 out of 197 industry groups tracked.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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