CrowdStrike, a cybersecurity firm, was caught up in a broad slump that afflicted markets worldwide (NASDAQ: CRWD). Its stock finished 2022 down 49%. It was particularly badly hit in the sell-off, as were many of the corporations that had outsized stock price appreciation during the previous bull run.

The Nasdaq composite, which is heavily weighted with technology stocks, had a particularly hard time during the bear market of 2022.

While the S&P 500 ended the year down 19%, the Nasdaq finished the year down 33%. Indeed, last year was the stock market’s worst year since 2008. However, the company’s long-term development potential makes it an attractive option to consider for 2023.

Investors may have been Alarmed by Macroeconomic Headwinds.

The headline numbers were outstanding when CrowdStrike published its fiscal 2023 third-quarter results in late November. Revenue increased 53% year on year for the period ending Oct. 31, and the company set quarterly records for both cash flow from operations ($243 million) and free cash flow ($174 million).

To be clear, a 54% year-over-year increase in recurring revenue is still quite excellent. A protracted trend of deceleration, on the other hand, is sure to have an impact on a company with the type of high value that CrowdStrike had prior to last year’s share price drop.

The average number of days it takes CrowdStrike to close a deal, for example, has climbed by 11% as customers take longer to examine their options and require more approvals before signing on with CrowdStrike.

So, What Makes CrowdStrike a No-Brainer Purchase

While it is true that revenue growth will continue to decline in the short term.

CrowdStrike anticipates a poor start to fiscal 2024 in terms of net new annual recurring revenue, with the second half of the year remaining flat compared to fiscal 2023. Still, the prediction assumes a 30% growth in yearly recurring revenue. That is still significant growth.

CrowdStrike has consistently done an excellent job of retaining customers and increasing their expenditure on its services over time. Its 124% dollar-based net retention rate indicates that current customers are spending 24% more with the company than they did a year earlier.

Furthermore, because so many of its clients have embraced four or more of its modules, the company has discontinued providing that figure. As of the third quarter, 60% of clients had five or more modules, 36% had six or more, and 21% had seven or more.

Despite these great user spending figures, CrowdStrike is also noticing a modest slowdown in these metrics. To offset this, the corporation is investing in extending its customer pipeline.

A new marketing executive is realigning marketing spend and increasing brand awareness to attract new customers.

This technique should enable CrowdStrike to attract new clients even in difficult circumstances, with the expectation that they will increase their spending as the economy improves. If this technique is effective, it has the potential to be a significant growth engine.

Cheaper, but NOT by Much.

CrowdStrike stock has never been inexpensive due to its track record of outstanding business performance.

However, its current pricing is quite appealing.

The company’s price-to-sales and price-to-free-cash-flow multiples have not only been steadily declining over the last year but are also near all-time lows.

CrowdStrike may likely have challenges this year, but there are many reasons to believe the company’s long-term prospects remain bright.

It’s possible that the stock will fall more from here, but its current value reflects more pessimism than I believe, given the company’s long-term prospects.

Considering this,  CrowdStrike, in my opinion, is a screaming buy for 2023.

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