How Might CrowdStrike Answer This $1.72 Billion Question?
Cloud-based cybersecurity company CrowdStrike Holdings (NASDAQ: CRWD) has shown how lucrative its business model can be. The company is rapidly growing, but that hasn't prevented it from turning a nice cash profit along the way. With $1.7 billion in net cash on its balance sheet, investors should look to see how management deploys its capital.
Its options include dividends or share repurchases, acquisitions, and standing pat. How a company spends its cash can give you a lot of insight into how management runs the business. I'll outline the likelihood of each option below, along with the potential pros and cons.
CrowdStrike has been generating positive free cash flow almost since it went public a few years back. Revenue has more than quadrupled since then, and free cash flow has grown steadily. Even though revenue growth has slowed as the numbers have gotten bigger, 52% year-over-year growth still lands the stock squarely in the growth category.
Source Fool.com
