CrowdStrike stock rating downgraded to Neutral by Piper Sandler

Investing.com - Piper Sandler downgraded CrowdStrike Holdings (NASDAQ:CRWD) from Overweight to Neutral on Monday, maintaining a price target of $505.00. According to InvestingPro data, the cybersecurity firm has seen impressive growth with a 50% YTD return and is currently trading near its 52-week high of $517.98.

The research firm cited the stock’s significant recent appreciation, with shares rising approximately 60% over the past three months, as the primary reason for the downgrade. This price movement has brought CrowdStrike’s shares close to Piper Sandler’s established price objective. InvestingPro analysis indicates the stock is currently overvalued, with a Financial Health Score of 2.53 (GOOD) and revenue growth of 26% in the last twelve months.

The cybersecurity company’s enterprise value now exceeds $125 billion, with shares trading at more than 21 times Piper Sandler’s out-year revenue forecast and approximately 70 times its out-year free cash flow estimate.

Piper Sandler noted it does not foresee any near-term scenario that would meaningfully increase its financial projections or terminal multiple for CrowdStrike, which it already considers the highest across its coverage universe.

Despite the downgrade, the research firm maintained a favorable long-term outlook on CrowdStrike’s opportunity as a security and IT consolidator, but advised investors against adding shares at current levels, suggesting upside could be limited over the short to medium term.

In other recent news, CrowdStrike has announced several developments that could impact investor considerations. The company has launched Falcon for AWS Security Incident Response, offering AWS customers access to its cybersecurity platform at preferred rates. This initiative aims to enhance threat detection and response capabilities within cloud environments, addressing the growing complexity of cyberattacks. Additionally, CrowdStrike has integrated its Falcon Cloud Security with NVIDIA (NASDAQ:NVDA)’s large language model services, expanding its security coverage for AI workloads and addressing risks such as data tampering and leakage.

Analyst activity has also been notable, with Bernstein SocGen Group downgrading CrowdStrike’s stock from Outperform to Market Perform, citing high valuation concerns. Conversely, BMO Capital has raised its price target to $500, maintaining an Outperform rating due to CrowdStrike’s strong quarterly performance and growth potential. Piper Sandler similarly increased its price target to $505, highlighting the company’s growth prospects and improved forward-looking metrics. These developments reflect differing analyst perspectives on CrowdStrike’s valuation and future performance within the cybersecurity sector.

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