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On Monday, TD Cowen exhibited confidence in CrowdStrike Holdings (NASDAQ:CRWD) by increasing the company’s price target to $450 from the previous $380, while sustaining a Buy rating on the stock. The firm’s analyst, Shaul Eyal, expressed optimism regarding CrowdStrike’s performance in the first quarter of fiscal year 2025, anticipating the company to maintain its strong net retention rates and revenue growth momentum. This positive outlook is supported by the company’s effective strategies in upselling and cross-selling its products. According to InvestingPro data, CrowdStrike’s stock has seen a remarkable 49.77% gain over the past six months, despite a recent 9.97% pullback last week. The company currently commands a market capitalization of $96 billion, trading at premium valuation multiples.
Eyal anticipates that CrowdStrike’s management will project a fiscal year 2026 revenue growth forecast slightly above the current market consensus of 19%. This expectation comes with a prediction of encouraging commentary from the company regarding clearer pipeline visibility. According to Eyal’s research, the incident on July 19, 2024, has not substantially altered customer opinions about the efficacy of CrowdStrike’s premier Falcon platform. InvestingPro data shows the company’s strong fundamentals, with a 31.35% year-over-year revenue growth and an impressive 75.24% gross profit margin, supporting the analyst’s optimistic outlook.
The analyst’s reassurance of the Buy rating and the increased price target is based on a valuation pegged at 17 times the enterprise value to fiscal year 2026 revenue. This adjustment is reflected in the raised adjusted earnings per share (EPS) estimates, which have been increased by 3% for fiscal year 2026 and by 6% for fiscal year 2027. The enhanced price target and EPS adjustments indicate TD Cowen’s belief in the cybersecurity company’s continued market performance and growth potential.
CrowdStrike, known for its Falcon platform, has been a key player in the cybersecurity industry, providing solutions to protect against cyber threats. The company’s ability to retain and grow its customer base, even in the face of industry challenges, has been a testament to its product’s effectiveness and the company’s strategic initiatives.
The revised price target and maintained Buy rating by TD Cowen are reflective of the firm’s positive assessment of CrowdStrike’s business trajectory and its potential to outperform in the cybersecurity sector. Investors and market watchers will be keeping a close eye on the company’s upcoming financial updates to see if it meets or exceeds the growth expectations laid out by analysts. InvestingPro subscribers can access over 30 additional financial metrics and insights about CrowdStrike, including detailed Fair Value analysis and comprehensive research reports that transform complex Wall Street data into actionable intelligence.
In other recent news, CrowdStrike Holdings is under investigation by the U.S. Department of Justice and the Securities and Exchange Commission concerning a $32 million transaction with Carahsoft Technology Corp. This deal, involving the sale of cybersecurity tools to the IRS, is being scrutinized due to its potential impact on CrowdStrike’s financial results, particularly as the IRS did not purchase the products from Carahsoft. The investigation includes interviews and record collection, focusing on the timing and accounting of the transaction. Additionally, CrowdStrike’s Chief Security Officer, Shawn Henry, has announced his retirement effective March 31, 2025, transitioning to an Executive Advisor role. In another development, Stifel analysts have raised their price target for CrowdStrike to $474, maintaining a "Buy" rating due to improved year-over-year growth and a positive outlook. CrowdStrike has also introduced Charlotte AI Detection Triage, an AI system aimed at enhancing security operations by reducing manual workload for security teams. Piper Sandler has expressed optimism about the software sector’s upcoming earnings, noting that CrowdStrike’s estimates might be overly optimistic.
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