CrowdStrike Q2 Earnings Lack Luster - Probably The Stock Can Move Up Anyway
Read on. Plenty in here about how to understand enterprise software in detail.
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Rock Solid Business, Eroding Slowly
by Alex King
There is nothing to not like about CrowdStrike CRWD 0.00%↑ fundamentals other than ... they keep getting worse. Growth rates have declined every quarter since July 2021, and cashflow margins have pretty much followed suit. As we've noted many times, that's not a healthy combination. Usually when software companies mature, their cashflow margins go up - because they are running out of market opportunity (ergo growth slowing) so they spend less on sales, marketing and product development in order to maximize yield from the remaining opportunity. Then they get bought by a buyout shop or by Oracle or whomever. This is the time-honored path much travelled in enterprise software.
CrowdStrike is following a different path.