- Needham hosted CrowdStrike Holdings Inc (NASDAQ:CRWD) on its first in-person NDR since COVID started. It had a Buy rating with a $340 (51.6% upside) price target.
- CrowdSrike developed the critical elements of technology with an integrated vision of a trustworthy Cloud-Native Security platform, from the lightweight agent with the embedded Threat Graph to the Data lake structure with its unique time-based architecture.
- CrowdStrike did not see any price pressure. Crowd's ARPU rose across each customer tier with the record highest gross retention at 98.1%. Needham did not see CrowdStrike over-priced.
- Moreover, CrowdStrike sold value. It is often able to reduce Security spending costs for customers.
- Finally, CrowdStrike is more than cloud technology. It's a cloud frictionless GTM.
- CRWD delivered another exceptional quarter, beating consensus revenues by 5% and posting a record Net New ARR of ~$217 million in 4QFY22 while adding over 1,600 new customers for the third consecutive quarter.
- CrowdStrike traded at an 11% discount to the hyper-growth security comps despite better margins and above-median growth.
- Needham saw CrowdStrike likely to grow over 50% for the next 2-3 years and 30% plus longer-term and deliver substantial Operating Margin leverage.
- CrowdStrike's platform delivered a powerful blend of frictionless trial and deployment and exceptional scalability, leading to the rapid growth of over 50% for the next 3-5 years.
- Needham saw CrowdStrike reach 20%-30% Operating Margins over the next 3-5 years. CrowdStrike already produced 30%-35% Free Cash Flow Margins.
- Needham sees CRWD as a core tech holding.
- Price Action: CRWD shares traded lower by 3.79% at $226.31 on the last check Monday.
