What happens to stocks if AI loses momentum?
On Tuesday, JMP Securities reaffirmed its Market Outperform rating on CrowdStrike Holdings (NASDAQ:CRWD), with a steady price target of $400.00. The cybersecurity giant, currently valued at $92 billion, is trading near $374, close to its 52-week high. According to InvestingPro data, the company maintains strong financial health with impressive growth metrics. Analyst Trevor Walsh highlighted several positive indicators for the cybersecurity company's performance. Among these, he identified robust quota attainment figures for several account executives, with percentages ranging from 92% to 172% for the fiscal year 2024.
Walsh pointed out the impressive quota achievements of two account executives in particular, one reaching 151% in the fourth quarter of fiscal year 2024 and another achieving 131% in the first half of the same fiscal year. These figures suggest strong sales performance and potential revenue growth for CrowdStrike, which is already demonstrating robust 31.35% year-over-year revenue growth and maintaining a healthy 75.24% gross profit margin.
In addition to the internal company metrics, Walsh shared insights from a subject-matter expert on Secure Access Service Edge (SASE). According to this expert, Fortinet (NASDAQ:FTNT) customers are considering their SASE options, with Cloudflare (NYSE:NET) being recognized for its success on the SSE (LON:SSE) side, mainly due to pricing advantages. Despite Cloudflare's decent brand and technology stack, it is still seen as a distant fourth or fifth in the market, indicating a competitive landscape where CrowdStrike operates.
Moreover, the expert provided perspective on the use of public versus private networks, highlighting Cloudflare's unique position. The expert noted that private networks are most effective with Cloudflare's technology, suggesting that if private networks were a priority for customers, Cloudflare would be more prominent in the market.
The analysis by JMP Securities, based on these observations, supports the firm's positive outlook on CrowdStrike's stock. The company's share price performance will continue to be watched by investors as these data points suggest potential for ongoing growth and market penetration. InvestingPro analysis reveals 12 additional investment tips and a comprehensive Pro Research Report, offering deeper insights into CrowdStrike's valuation and growth prospects.
In other recent news, CrowdStrike has seen several significant developments. Truist Securities has raised the company's stock price target to $385, expressing optimism about the company's growth trajectory despite anticipating temporary subdued upsell dollar values and a higher than usual level of contraction. RBC Capital Markets also increased its price target for CrowdStrike to $420, highlighting the company's strong financial health and the successful adoption of new product modules. CrowdStrike's partnership with SHI International has led to the cybersecurity firm surpassing $1 billion in total sales, demonstrating the increasing market demand for AI-powered cybersecurity solutions. The company has also converted all outstanding Class B shares into Class A shares, altering the voting power landscape of CrowdStrike's shareholders. These are recent developments that reflect the ongoing activities within CrowdStrike Holdings.
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