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One simple way to benefit from the stock market is to buy an index fund. But if you pick the right individual stocks, you could make more than that. For example, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) shareholders have seen the share price rise 61% over three years, well in excess of the market return (36%, not including dividends).
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for CrowdStrike Holdings
CrowdStrike Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
CrowdStrike Holdings' revenue trended up 46% each year over three years. That's well above most pre-profit companies. While the compound gain of 17% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at CrowdStrike Holdings. A window of opportunity may reveal itself with time, if the business can trend to profitability.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for CrowdStrike Holdings in this interactive graph of future profit estimates.
A Different Perspective
The last twelve months weren't great for CrowdStrike Holdings shares, which cost holders 12%, while the market was up about 10%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Investors are up over three years, booking 17% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for CrowdStrike Holdings that you should be aware of before investing here.