When Will CrowdStrike Holdings, Inc. (NASDAQ:CRWD) Turn A Profit?

Simply Wall St
·3 min read
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CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CrowdStrike Holdings, Inc. provides cloud-delivered protection across endpoints and cloud workloads, identity, and data. On 31 January 2023, the US$31b market-cap company posted a loss of US$183m for its most recent financial year. As path to profitability is the topic on CrowdStrike Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for CrowdStrike Holdings

CrowdStrike Holdings is bordering on breakeven, according to the 40 American Software analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$166m in 2026. Therefore, the company is expected to breakeven roughly 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 40% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for CrowdStrike Holdings given that this is a high-level summary, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. CrowdStrike Holdings currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in CrowdStrike Holdings' case is 50%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of CrowdStrike Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – CrowdStrike Holdings' company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

  1. Valuation: What is CrowdStrike Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether CrowdStrike Holdings is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CrowdStrike Holdings’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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