Stock Analysis on Net
Stock Analysis on Net

CrowdStrike Holdings Inc. (NASDAQ:CRWD)

Present Value of Free Cash Flow to the Firm (FCFF)

Microsoft Excel

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)

CrowdStrike Holdings Inc., free cash flow to the firm (FCFF) forecast

US$ in thousands, except per share data

Microsoft Excel
Year Value FCFFt or Terminal value (TVt) Calculation Present value at 14.45%
01 FCFF0 945,691
1 FCFF1 882,118 = 945,691 × (1 + -6.72%) 770,735
2 FCFF2 865,849 = 882,118 × (1 + -1.84%) 660,996
3 FCFF3 892,117 = 865,849 × (1 + 3.03%) 595,054
4 FCFF4 962,699 = 892,117 × (1 + 7.91%) 561,053
5 FCFF5 1,085,828 = 962,699 × (1 + 12.79%) 552,907
5 Terminal value (TV5) 73,702,881 = 1,085,828 × (1 + 12.79%) ÷ (14.45% – 12.79%) 37,529,750
Intrinsic value of CrowdStrike Holdings Inc. capital 40,670,494
Less: Senior Notes (fair value) 671,200
Intrinsic value of CrowdStrike Holdings Inc. common stock 39,999,294
 
Intrinsic value of CrowdStrike Holdings Inc. common stock (per share) $163.18
Current share price $259.13

Based on: 10-K (reporting date: 2024-01-31).

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Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Weighted Average Cost of Capital (WACC)

CrowdStrike Holdings Inc., cost of capital

Microsoft Excel
Value1 Weight Required rate of return2 Calculation
Equity (fair value) 63,519,609 0.99 14.58%
Senior Notes (fair value) 671,200 0.01 2.37% = 3.00% × (1 – 21.00%)

Based on: 10-K (reporting date: 2024-01-31).

1 US$ in thousands

   Equity (fair value) = No. shares of common stock outstanding × Current share price
= 245,126,420 × $259.13
= $63,519,609,214.60

   Senior Notes (fair value). See details »

2 Required rate of return on equity is estimated by using CAPM. See details »

   Required rate of return on debt. See details »

   Required rate of return on debt is after tax.

   Estimated (average) effective income tax rate
= (26.24% + 21.00% + 21.00% + 21.00% + 21.00%) ÷ 5
= 21.00%

WACC = 14.45%

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

CrowdStrike Holdings Inc., PRAT model

Microsoft Excel
Average Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Selected Financial Data (US$ in thousands)
Interest expense 25,756 25,319 25,231 1,559 442
Net income (loss) attributable to CrowdStrike 89,327 (183,245) (234,802) (92,629) (141,779)
 
Effective income tax rate (EITR)1 26.24% 21.00% 21.00% 21.00% 21.00%
 
Interest expense, after tax2 18,998 20,002 19,932 1,232 349
Interest expense (after tax) and dividends 18,998 20,002 19,932 1,232 349
 
EBIT(1 – EITR)3 108,325 (163,243) (214,870) (91,397) (141,430)
 
Long-term debt 742,494 741,005 739,517 738,029 —
Total CrowdStrike Holdings, Inc. stockholders’ equity 2,303,950 1,463,641 1,025,764 870,574 742,107
Total capital 3,046,444 2,204,646 1,765,281 1,608,603 742,107
Financial Ratios
Retention rate (RR)4 0.82 — — — —
Return on invested capital (ROIC)5 3.56% -7.40% -12.17% -5.68% -19.06%
Averages
RR 0.82
ROIC -8.15%
 
FCFF growth rate (g)6 -6.72%

Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

1 See details »

2024 Calculations

2 Interest expense, after tax = Interest expense × (1 – EITR)
= 25,756 × (1 – 26.24%)
= 18,998

3 EBIT(1 – EITR) = Net income (loss) attributable to CrowdStrike + Interest expense, after tax
= 89,327 + 18,998
= 108,325

4 RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [108,325 – 18,998] ÷ 108,325
= 0.82

5 ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 108,325 ÷ 3,046,444
= 3.56%

6 g = RR × ROIC
= 0.82 × -8.15%
= -6.72%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value0 × WACC – FCFF0) ÷ (Total capital, fair value0 + FCFF0)
= 100 × (64,190,809 × 14.45% – 945,691) ÷ (64,190,809 + 945,691)
= 12.79%

where:

Total capital, fair value0 = current fair value of CrowdStrike Holdings Inc. debt and equity (US$ in thousands)
FCFF0 = the last year CrowdStrike Holdings Inc. free cash flow to the firm (US$ in thousands)
WACC = weighted average cost of CrowdStrike Holdings Inc. capital

FCFF growth rate (g) forecast

CrowdStrike Holdings Inc., H-model

Microsoft Excel
Year Value gt
1 g1 -6.72%
2 g2 -1.84%
3 g3 3.03%
4 g4 7.91%
5 and thereafter g5 12.79%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5 – g1) × (2 – 1) ÷ (5 – 1)
= -6.72% + (12.79% – -6.72%) × (2 – 1) ÷ (5 – 1)
= -1.84%

g3 = g1 + (g5 – g1) × (3 – 1) ÷ (5 – 1)
= -6.72% + (12.79% – -6.72%) × (3 – 1) ÷ (5 – 1)
= 3.03%

g4 = g1 + (g5 – g1) × (4 – 1) ÷ (5 – 1)
= -6.72% + (12.79% – -6.72%) × (4 – 1) ÷ (5 – 1)
= 7.91%