Shares may be pulling back from their 52-week highs, but the party’s far from over for CrowdStrike (NASDAQ:CRWD) and CRWD stock. The cybersecurity powerhouse has seen its shares make epic moves so far this year. Since March’s novel coronavirus selloff, shares have more than tripled off their lows.

And with good reason. With the pandemic and its “work-from-home economy” tailwind, CrowdStrike has been crushing it.

As I wrote back in June, the company beat sales and earnings expectations. For the quarter ending April 30, 2020, revenue jumped 85% over the prior year’s quarter.

But that’s only the start. The shift to remote working due to the pandemic means more demand than ever for the company’s cloud-based cybersecurity offerings.

And this pandemic tailwind is on top of the already high growth prospects for the cybersecurity space. With this in mind, it’s clear why CRWD stock sports a rich valuation, like other names “crushing it” right now, such as Shopify (NYSE:SHOP) and Zoom Video (NASDAQ:ZM).

The company’s current valuation is sustainable. And as the company continues to beat expectations, it has more room to grow. In short, good reason why shares can still head higher from here.

‘Work-From-Home Economy’ and CRWD Stock

For many hard-hit industries (airlines, casinos, cruise lines and retail), the “new normal” means bad news. With the pandemic’s economic effects possibly lasting longer than anticipated, these industries face greater uncertainty. But with the tech sector? “New normal” means something else entirely.

What do I mean? The so-called work-from-home economy is a tailwind, not a headwind, for many major tech names. For Microsoft (NASDAQ:MSFT), it has driven demand for its cloud-based platforms. For DocuSign (NASDAQ:DOCU), it has boosted demand for its eSignature services.

And for CrowdStrike? It has bolstered demand for endpoint security. Right now, you have millions of white-collar workers logging in remotely. This leaves them more vulnerable to cybercriminals. But Corporate America has gotten the message.

Deploying CrowdStrike’s solutions, they can shore up potential security leaks. But, don’t assume this tailwind is going to fizzle out once the pandemic is in the rearview mirror. If anything, this crisis is merely accelerating a megatrend already in motion. That would be large-scale, permanent remote working.

Many major names in tech have already signed off on the idea. Expect others to soon follow suit. Add in this company’s cloud-based platform giving it a clear edge against “on-premises” based rivals like FireEye (NASDAQ:FEYE) and Palo Alto (NYSE:PANW), and it’s obvious why Wall Street continues to price-in high expectations for CrowdStrike.

Speaking of valuation, I can see why this stock’s rich multiple could make one hesitant to buy at today’s prices. Yet, don’t let valuation scare you off this opportunity. You may have to pay up for quality. But, the long-term upside makes it more than worthwhile.

Don’t Miss Out Due to Valuation

Even among “too hot to touch” tech stocks, CRWD stock trades at a high valuation. Shares today sport a price-to-sales ratio of 34.9x. Granted, Shopify (price-to-sales of 63.4x) and Zoom (price-to-sales of 87x) trade at even richer valuations.

But, while CrowdStrike’s current multiple prices-in much of the company’s anticipated growth, don’t view this is as a reason to avoid the stock.

Why? With this company slated to continue “crushing it,” I don’t see shares taking a dip due to valuation concerns. If anything, the pandemic has accelerated a change in mindset among investors. Instead of sweating over multiples and other valuation metrics, it’s the long-term growth story that matters.

And with CrowdStrike, not only is there a strong “story” backing up the stock. Said “story” offers much less uncertainty than with other popular stocks right now. Other megatrends may take a breather if tough economic times linger. But, cybersecurity demand likely won’t. This is one area businesses won’t be tightening their belts.

This doesn’t only mean the company lives up to its already high expectations. You can make the argument CrowdStrike will exceed Wall Street’s growth estimates. With this in mind, shares are more likely to head higher on multiple expansion, than fall lower due to valuation contraction.

CrowdStrike Remains a Long-Term Buy

Given shares have more than tripled off their coronavirus lows, you may think you missed the boat with CrowdStrike. But think again. With today’s “work-from-home” economy, expect the company to continue “crushing it” in the near-term.

And, as remote workplaces gain critical mass, expect the company to not just meet, but exceed expectations. As their growth story continues, multiple expansion, not contraction, is the most likely outcome.

In short, CRWD stock will continue to climb higher in the “new normal.”

— Matt McCall

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Source: Investor Place