CRWD – Base Case iCDS 19bps, Negative Case iCDS 36bps, 2029 3.000% Bond YTW of 4.856%, iYTW of 3.723%, Baa2 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
October 4, 2024
- Credit markets are overstating CRWD’s credit risk with a YTW of 4.856% relative to an Intrinsic YTW of 3.723% and an Intrinsic CDS of 19bps.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, most members of management are material owners of CRWD equity relative to their annual compensation, indicating they may be aligned with shareholders to pursue long-term value creation for the company.
- Earnings Call Forensics™ of the firm’s Q2 2024 (08/28/2024) earnings call highlights that management is confident its strong Q2 performance demonstrates the trust the market and customers have in the firm. Moreover, they are confident their LogScale Next-gen SIEM, Identity Protection and Cloud Security hyper-growth business now has a $1+ billion ARR, and that LogScale Next-Gen SIEM grew by 140% year-over-year. Furthermore, they are confident its Falcon Flex relationship with AWS allows for the procurement of the full range of cybersecurity needs tailored to customers, that it has been able to drive customer retention through customer commitment packages, especially through flexible payment terms, and that customers have been consuming their Falcon Flex packages faster than they anticipate.
