After years of investment, cyber-security firm Crowdstrike (CRWD:NASDAQ) is poised to kick-start its profitable growth phase, one that could keep the stock on the boil. The shares have already doubled in 2023 as investors bet on AI-powered growth years into the future, and that optimism is shared by Stifel analyst Adam Borg.

‘Crowdstrike’s differentiation is its high-efficacy cloud-based endpoint technology, lightweight single-agent architecture, and massive scale analysing over a trillion events daily,’ the analyst recently wrote. He expects that the Austin, Texas-based company will be able to sustain revenue growth of somewhere in the low-to-mid-20% range, at a minimum, while improving its operating margin and free-cash-flow generation. Those factors could drive a more generous valuation, according to Borg.

Crowdstrike has run-up more than a billion dollars of net losses since 2018 to get to this place, and investors are hoping their patient backing will continue to pay off. Consensus for the third quarter 2024 (28 November) calls for a 30% jump in earnings to $0.74 per share on $777 million of revenue.

That would inspire confidence the vast profits being promised are no pipedream. Consensus forecasts see a rough $680 million net profit this year (to 31 January), and above $870 million the year after, according to Stockopedia data.

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