Crwd vs avgo what is a better buy
11/11/2024 11:47pm
**CrowdStrike Holdings (CRWD)** is a stronger buy compared to Broadcom (AVGO) for several reasons:
1. **Financial Performance and Growth**: CrowdStrike has demonstrated impressive growth rates in net income and revenue, with a net income growth rate of 935.7% and a revenue growth rate of 32.35%. Broadcom, on the other hand, has experienced a significant decline in net income growth rate of -85.12% and a revenue growth rate of 41.46%. CrowdStrike's growth trajectory is more robust.
2. **Earnings and Valuation**: CrowdStrike's diluted EPS is $0.36, with a cumulative year-over-year growth of 800%. The company's P/E ratio stands at 481.94, indicating that the market is currently valuing the company's earnings at a premium. Broadcom's diluted EPS is $0.33, with a cumulative year-over-year growth of -86.64%, and its P/E ratio is 164.17. While CrowdStrike's higher P/E ratio suggests it may be more expensive, it also indicates strong investor confidence in its future earnings potential.
3. **Analyst Ratings and Price Targets**: Both stocks have a "Strong Buy" consensus rating. However, CrowdStrike's average analyst price target is $324.9, which is higher than its current price, suggesting potential for price appreciation. Broadcom's average analyst price target is $204.55, which is below its current price, indicating that analysts see less upside potential in the near term.
4. **Institutional Confidence**: There has been significant institutional investment in CrowdStrike, with several large investors increasing their positions in the company. This indicates strong confidence in CrowdStrike's long-term prospects. In contrast, while Broadcom also has a strong institutional presence, the increase in some institutional positions is less pronounced compared to CrowdStrike.
5. **Market Position and Product Offerings**: CrowdStrike is a leading provider of cybersecurity solutions with a unified platform that offers cloud-delivered protection across various domains. The company's innovative solutions and strong market presence position it well for continued growth. Broadcom, while a significant player in the semiconductor industry, operates in a different market space and may not have the same level of growth potential in cybersecurity.
6. **Recent Developments**: CrowdStrike's recent technical outage, while a significant incident, may have long-term positive effects as it addresses the issue and strengthens its cybersecurity offerings. Broadcom has benefited from the AI narrative, but the impact of this on long-term growth is less clear.
In conclusion, while both stocks have their strengths, CrowdStrike's superior financial performance, higher growth rates, and stronger analyst confidence make it the better buy between the two. However, investors should consider their own risk tolerance and investment goals, as high-growth stocks like CrowdStrike may carry more volatility than more established companies like Broadcom.