CrowdStrike price target cut to $290 from $380, buy rating kept

On Tuesday, DA Davidson adjusted its outlook on CrowdStrike Holdings (NASDAQ:CRWD), a leader in cybersecurity solutions. The firm lowered its price target on the company's shares to $290 from $380, while maintaining a Buy rating. This revision follows a substantial ~35% decline in CrowdStrike's stock value after a recent service outage in July.

The decision to maintain a Buy rating despite the price target reduction reflects an anticipation of a stronger-than-expected second fiscal quarter report and a possible revision of the fiscal year 2025 guidance. CrowdStrike is set to release its financial results on Wednesday, August 28, 2024.

DA Davidson has made slight reductions to its second half fiscal year 2025 estimates and more significant adjustments to its fiscal year 2026 projections. The firm's stance is based on the expectation that CrowdStrike will quickly recover from the recent setback, citing the company's robust reputation and its status as a provider of top-tier cybersecurity platforms.

The analyst's comments emphasize a belief that the recent pullback in CrowdStrike's share price has adequately factored in the potential negative impacts of the July outage. Despite negative feedback from channel partners in the second fiscal quarter survey, there is still a positive outlook for the upcoming financial disclosures.

In other recent news, CrowdStrike, a prominent cybersecurity firm, has faced a series of challenges. Piper Sandler upgraded CrowdStrike's rating from Neutral to Overweight despite a reduction in the price target to $290 from $310, following a significant global outage.

The firm views the recent stock price drop as a buying opportunity for investors. Alphabet (NASDAQ:GOOGL) Inc. has also notably reduced its stake in CrowdStrike by almost half, as disclosed in a Securities and Exchange Commission filing.

Meanwhile, CrowdStrike is dealing with a class-action lawsuit filed by shareholders over a software outage that disrupted services across multiple sectors. Analyst firms Jefferies and Needham have responded to these developments by lowering their price targets for CrowdStrike, while maintaining their Buy ratings.

Evercore ISI also lowered its price target, citing ongoing uncertainties, but retained an Outperform rating due to the company's robust product platform and position in the cybersecurity market.

InvestingPro Insights

As CrowdStrike Holdings (NASDAQ:CRWD) prepares to release its financial results, current data from InvestingPro presents a mixed picture with several key points to consider. The company boasts a robust market capitalization of $60.21 billion, which underscores its significant presence in the cybersecurity sector. However, investors should be aware of the high P/E ratio, which currently stands at 453.25, indicating a premium valuation that may reflect high growth expectations.

InvestingPro Tips highlight that CrowdStrike holds more cash than debt on its balance sheet, suggesting a strong financial position. Additionally, the company is expected to see net income growth this year, which could be a positive driver for the stock. However, analysts have expressed caution, with 12 analysts revising their earnings downwards for the upcoming period, and the stock trading at high earnings and revenue valuation multiples. Notably, the stock has experienced significant price fluctuations over the last three months, with a 25.01% drop, which may have been influenced by the recent service outage and subsequent negative sentiment.

For investors seeking a deeper dive into CrowdStrike's financial health and stock performance, there are over 18 additional InvestingPro Tips available, which provide a comprehensive analysis of the company's prospects. Visit https://www.investing.com/pro/CRWD for more detailed insights.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.