BlackBerry recently acquired Cylance, a leading AI-based cybersecurity platform for $1.4B, all cash. The market was unimpressed. At less than 7 times projected revenues, many investors criticized Jack Chen for paying too much.
A few months later, CrowdStrike (CRWD), one of Cylance’s main competitors, went public and its market valuation immediately shot up to $13B. Including the nearly $200M in cash on its balance sheet, CRWD trades at 9 times the P/S ratio BlackBerry paid for Cylance.
Such a difference in price could be explained by the difference in size. Indeed, CRWD’s revenues