They are probably all healthy - they are just at different stages - some are still striving for strong growth in order to have the greatest possible operating leverage later on, others are turning the profitability screw because less growth is possible. I find it difficult to identify a real moat, as some are fishing in different waters. PS: and $NET is not a real cyber security company. My favs are Crowdstrike, Palo Alto and (Cloudflare)
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@Krush82 I've also been thinking about Cloudflare and Crowdstrike in particular for many years (less so about Palo Alto) but have never really been able to motivate myself to buy them because I don't understand the industry that well.
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@WarrenG If you can't make up your mind or don't want to delve any further into the matter, the Cyber Security etf from wisdom tree is not a bad choice.
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•@Krush82 However, I also take a critical view of such thematic ETFs. The ETF is linked to ESG criteria (garbage) and is also not simply passively weighted according to market cap but according to the "focus score" of an external management consultant and sales growth (also garbage).
I'd rather bet on stocks that I can evaluate according to value investing and GARP models (Fortinet) to play on the topic or hope that at some point a clever analysis will appear on YouTube explaining for dummies what actually distinguishes Crowdstrike and Cloudflare.
I'd rather bet on stocks that I can evaluate according to value investing and GARP models (Fortinet) to play on the topic or hope that at some point a clever analysis will appear on YouTube explaining for dummies what actually distinguishes Crowdstrike and Cloudflare.
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@Krush82 Cloudflare is a cybersecurity company. WAF, DDOS Protection, DNS Security and Zero Trust solutions clearly speak for themselves.
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@WarrenG The way the etf is put together, you have all the relevant players in one basket. You can't complain about the weighting either, as the performance shows.
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@KapriolenCapital I am also partly familiar with this. For me, however, cliudflare is mainly Internet infrastructure, i.e. CDN, which ensures that content can be transported quickly and reliably
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@Alexxela Where exactly do you see growth potential? In direct comparison with Crowdstrike, I don't see it. SentinelOne's latest revenue growth was 42% (35% CRWD), although SentinelOne only generates 1/4 of Crowdstrike's revenue. They will have to maintain or increase the 42% growth for a damn long time to reach a similar level. The operating margin is still almost -50% (CRWD minimally positive). If they want to move further towards profitability, sales growth will slow down. Cash flow also still looks negative. The share is valued more favorably than Crowdstrike, but that has its reasons. I'm looking forward to the next earnings.
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@Krush82 I'm not an IT expert, but from what I've read on the internet, both companies offer similarly good solutions. in the case of $S, both marketcap and revenue are around 1/10 that of $CRWD, so growth may be faster and greater.
In addition, unlike $S, $CRWD is a cloud solution - and there could be more competition in this area, e.g. from $MSFT (at least according to analysts etc.)
These were my reasons for saying that I see more growth potential.
In addition, unlike $S, $CRWD is a cloud solution - and there could be more competition in this area, e.g. from $MSFT (at least according to analysts etc.)
These were my reasons for saying that I see more growth potential.
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@Alexxela The decisive factor is not whether the product(s) is/are better than the others, but how this is reflected in the company's results/growth. That's true about the market cap, but the turnover is 1/4, not 1/10 of crowdstrike. You can see that they are currently only growing at 42%. The lower the turnover in absolute figures, the faster they should be growing. But they are not. Micorsoft is currently focusing on Azure and AI, they are not really going to attack here now
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