Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

4. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)

Consensus Long-Term EPS Growth Estimate: 32%

Number of Hedge Fund Holders: 69

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity products and services provider whose Falcon system was at the heart of one of the biggest IT outages earlier this year. Its shares are down 9% since the blackout and have gained 53% since the post-outage bottom. The recovery in CrowdStrike Holdings, Inc. (NASDAQ:CRWD)’s stock is based on shifting investor attitudes about the firm’s subscription revenue and legal implications stemming from the outage. As few legal troubles and customer switching surface, investors are slowly creeping back to CrowdStrike Holdings, Inc. (NASDAQ:CRWD)’s stock. However, the firm is continuing to face pressure from Delta Airlines because of the outage as the two companies have sued each other. Apart from the implications of the outage, CrowdStrike Holdings, Inc. (NASDAQ:CRWD)’s $10 billion recurring revenue guidance for 2031 and a midpoint free cash flow margin guidance of 36% will continue to drive its margin due to the central role that the metrics play in any software company’s hypothesis.

Baron Funds mentioned CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q2 2024 investor letter. Here is what the fund said:

“CrowdStrike Holdings, Inc. is a cloud-architected SaaS cybersecurity vendor offering endpoint security, threat intelligence, and cyberattack response services. Shares continued their strong performance from the first quarter and were again a top contributor, rising 19.5% in the second quarter on better execution than peers in the broader security space. The company reported strong quarterly results with 33% year-over-year revenue growth, driven by customers consolidating their cybersecurity spend on CrowdStrike with free cash flow margins reaching 35%. With accelerating market share gains in its core endpoint detection and response offering, emerging products including Cloud, Identity, and SIEM reaching material scale, and newer products in data protection and AI ramping quickly, net new annual recurring revenue and total revenue look to sustain a long duration of growth. With its leading competitive positioning in cybersecurity, the growing threat landscape (which is also driven by the advancements in AI, making hackers more dangerous), its unique lightweight, single-agent, architecture, and its platform approach, we retain conviction in CrowdStrike, which is emerging as the security platform to beat in terms of scale, profitability, and free cash flow conversion.”