Will CrowdStrike Be a Trillion-Dollar Stock by 2040?

CrowdStrike (NASDAQ: CRWD) has generated big gains since its public debut in June 2019. The cybersecurity company went public at $34 with a valuation of $6.7 billion, and it now trades at about $300 with a market cap of $70 billion.

The bulls loved CrowdStrike because it was disrupting older cybersecurity companies with its cloud-native services, which locked its customers into sticky subscriptions and eliminated the need for on-site appliances. From fiscal 2020 (which ended in Jan. 2020) to fiscal 2023, its annual revenue grew at a compound annual growth rate (CAGR) of 67% as its total number of subscription customers more than quadrupled from 5,431 to 23,019.

Those breakneck growth rates are impressive, but could CrowdStrike continue expanding and become a trillion-dollar company by 2040? Let’s review its business model to see if it has a shot at joining the four-comma club.

CrowdStrike’s hypergrowth days could be over

Analysts expect CrowdStrike’s revenue to rise 36% in fiscal 2024, 29% in fiscal 2025, and 26% in fiscal 2026. We should take those estimates with a grain of salt, but they suggest its business is maturing as it faces more competitors.

For example, Palo Alto Networks (NASDAQ: PANW) is expanding into the cloud security market with Prisma, Microsoft is rolling out more first-party cybersecurity services for its cloud-based ecosystem, Cisco is integrating more cybersecurity services into its own networking equipment, and its smaller challenger SentinelOne is trying to automate the entire threat detection process with AI algorithms across a hybrid mix of on-site appliances and cloud-based services.

The cloud-native network security market could expand at a CAGR of 14% from 2024 to 2029, according to Global Market Estimates. Mordor Intelligence expects the cloud endpoint security market — where CrowdStrike’s Falcon mainly operates — to grow at a CAGR of only 12% during the same period.

CrowdStrike might continue to grow faster…